Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 77% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money.
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 77% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money.

EUR/USD and GBP/USD under pressure as USD/JPY reclaims ¥126

Dollar strength continues to hobble EUR/USD and GBP/USD, while pushing USD/JPY to its highest level in seven years.

EUR/USD returns to March lows

There has been no real let-up in the bearishness displayed by EUR/USD, with the performance in April so far seeing further losses as concerns about slowing economic growth and also the French elections weigh on the currency. In addition, the central bank outlook provides little relief, since the European Central Bank’s (ECB) is not expected to actually begin raising rates for some time yet, while the Federal Reserve Bank (Fed) is already into its hiking cycle and indeed is expected to quicken the pace at its next meeting to 50 basis point (bp) hikes from the 25 basis points enacted last time around.

Overall the broad bearish trend is firmly intact, with the price operating below the 50-, 100- and 200-day moving averages (MAs), continuing the theme of the past year. The bounce at the end of March carried the price back towards the $1.12 area, and also saw it return to the 50-day MA, but this rally was short-lived and ended up creating a lower high. The resultant drop has carried the price back to the low of early March around $1.08.

Buyers are attempting to mount a defence here, but even a bounce would only risk creating another lower high, and it would take a move above $1.12 to alter this view. In the medium term, further downside towards the 2020 lows seems to loom, with $1.0777, $1.0727 and then $1.0637 as downside targets.

GBP/USD wilts after inflation data

Similarly, the downtrend in the sterling-dollar cross is rapidly nearing its first anniversary, despite the Bank of England’s (BOE) own hiking policy. Here the picture sees the UK central bank looking to hold the pace of its tightening at 25 bp, with the most recent decision and minutes reflecting caution about the impact of tighter policy on the UK economy.

Losses for GBP/USD have been quite dramatic, losing nearly 700 points since mid-January, as the inflation outlook prompts the Fed to shift to a much more hawkish policy. As a result the dollar has been in the ascendant, and sterling’s downtrend has been firmly established with a series of lower highs and lower lows.

The latest decline has carried the price back to the $1.30 area from March, but this can only offer scant comfort to the bulls. Further losses would bring $1.285 and then $1.269 into view, pushing the pair to levels last seen in the autumn of 2020. A short-term rebound targets $1.32, and then on towards the late-March high at $1.33.

USD/JPY tops ¥126

USD/JPY continues its astonishing performance, rallying towards the ¥126 level as the wide divergence between the Fed and Bank of Japan (BoJ) continues. While the former is set on tightening policy aggressively, and is expected to raise rates by 50 bp at its next meeting, the latter is content to hold steady with the loose policy that has been such a feature of Japanese economic life for so long.

The pair’s uptrend was an established fact before the recent surge, and has been since the beginning of 2021, as the market appeared to shift towards a long dollar view for this pair, perhaps pre-empting the Fed’s hawkish turn late on in the year. The recent surge is on a par with the rally in the pair in quarter one (Q1) of 2021, and has been instrumental in breaking USD/JPY out of the steady decline seen since 2015.

​The recent gains have carried the price back to the ¥126 area, last seen in 2015. Additional upside targets ¥135, last seen in January 2002. So far the yawning gap between the price and the 50-day simply moving average (SMA) appears not to be an issue, since bullish momentum is so strong. A short-term reversal brings ¥124 and then ¥121.50 into view.

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

Start trading forex today

Find opportunity on the world’s most-traded – and most-volatile – financial market.

  • Trade spreads from just 0.6 points on EUR/USD
  • Analyse with clear, fast charts
  • Speculate wherever you are with our intuitive mobile apps

See an FX opportunity?

Try a risk-free trade in your demo account, and see whether you’re onto something.

  • Log in to your demo
  • Take your position
  • See whether your hunch pays off

See an FX opportunity?

Don’t miss your chance – upgrade to a live account to take advantage.

  • Get spreads from just 0.6 points on popular pairs
  • Analyse and deal seamlessly on fast, intuitive charts
  • See and react to breaking news in-platform

See an FX opportunity?

Don’t miss your chance. Log in to take your position.

Live prices on most popular markets

  • Equities
  • Indices
  • Forex
  • Commodities
website terms and agreements. Prices are indicative only. All share prices are delayed by at least 15 minutes.

" edit-mode="false" style="--live-prices-table-rows:5" >


Prices above are subject to our website terms and agreements. Prices are indicative only. All share prices are delayed by at least 15 minutes.

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.

Plan your trading week

Get the week’s market-moving news sent directly to your inbox every Sunday. The Week Ahead gives you a full calendar of upcoming economic events, as well as commentary from our expert analysts on the key markets to watch.


For more info on how we might use your data, see our privacy notice and access policy and privacy webpage.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of spread betting and CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.