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Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 71% 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 surges to five-month high while EUR/JPY resumes its descent

Outlook on EUR/USD and EUR/JPY amid depreciating US dollar and solid Japan industrial production and retail sales data.

FX table Source: Bloomberg

EUR/USD trades in five-month high

EUR/USD is on track for its fifth straight day of gains as the greenback continues to depreciate amid a strong US bond auction and falling yields which brought forward rate cut expectations on Wednesday.

The 27 July high at $1.1149 represents the next upside target ahead of the $1.1275 July peak.

Good support below the $1.1065 August high can be seen between the accelerated December uptrend line at $1.1044, the November peak at $1.1017 and the mid-December high at $1.1009.

Daily EUR/USD Chart Source: ProRealTime
Daily EUR/USD Chart Source: ProRealTime

EUR/JPY resumes its descent

On Wednesday EUR/JPY didn’t quite manage to retest its ¥158.57 19 December high and instead resumed its descent after stronger than expected Japan industrial production and retail sales add weight to the argument for tighter monetary policy from the Bank of Japan (BoJ) while US rate cut expectations were brought forward after another successful bond auction.

Last week’s low at ¥156.13 is thus back on the plate, a fall through which would engage the 200-day simple moving average (SMA) at ¥154.87.

Good resistance above Thursday’s ¥157.47 intraday high can be seen along the November-to-December downtrend line at ¥158.12 and the recent mid- to late December highs at ¥158.39 to ¥158.57.

EUR/USD Daily Chart Source: ProRealTime
EUR/USD Daily Chart Source: ProRealTime

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