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Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% 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 USD/CAD await US unemployment data while EUR/GBP stays bid

Outlook on EUR/USD, EUR/GBP and USD/CAD ahead of US NFP data.

US flag Source: Bloomberg

EUR/USD trades in near one-month lows ahead of US NFP data release

Ahead of Friday’s US non-farm fayroll (NFP) data, which is expected to show that the US economy added 200 thousand jobs in December 2022 after a 263 thousand rise in November, EUR/USD is trading in near one-month lows and may slide further towards the $1.0481 to $1.0444 mid-November high and early-December low.

Were this support zone to give way, the 55-day simple moving average (SMA) at $1.037 and the 200-day SMA at $1.0314 might be back in play. Only a bullish reversal and rise above Thursday’s $1.0631 high would have bullish connotations and may open the way for the mid- to late December highs at $1.0715 to $1.0736 to be revisited but this area represents good resistance.

EUR/USD chart Source: IT-Finance.com
EUR/USD chart Source: IT-Finance.com

EUR/GBP remains bid as UK house price growth slows

EUR/GBP’s recovery from this week’s £0.8783 low towards the October and late-December highs at £0.8867 to £0.8877 remains on track as the UK Halifax house price index shows the lowest growth since October 2019. The index increased 2% year-on-year (YoY) in December 2022, down from 4.6% in November. Compared to the previous month, house prices fell 1.5%, marking the fourth straight month of declines.

Only a rise and daily chart close above the December high at £0.8877 would put the minor psychological £0.90 region back on the plate. Intraday support sits at the £0.8828 November peak and more important support can be spotted along the two-month uptrend line at $0.881. Only a currently unexpected fall through Tuesday and Wednesday’s lows at £0.8783 and the £0.878 - 21 October high - may lead to the 55-day SMA at £0.8703 being back in sight.

EUR/GBP chart Source: IT-Finance.com
EUR/GBP chart Source: IT-Finance.com

USD/CAD recovery ongoing ahead of US unemployment data

USD/CAD’s early-January drop to C$1.347 has been followed by a recovery rally on Thursday on stronger-than-expected US ADP non-farm employment data which may act as a precursor to stronger US NFP data, out on Friday.

The USD/CAD cross is thus heading back up towards its October-to-January downtrend line at C$1.3669, above which the December and early-January highs can be spotted at C$1.3685 to C$1.3705. Immediate upside pressure should be maintained while Friday’s intraday low at C$1.3538 isn’t being slipped through, in which case the mid-December trough at C$1.3519 would be in sight. Further down sit the late-December and current January lows at C$1.3484 to C$1.347.

USD/CAD chart Source: IT-Finance.com
USD/CAD chart Source: IT-Finance.com

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.

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