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Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76% 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.

GBP/USD slips to 37-year low, EUR/USD to 20-year low while EUR/GBP rallies

EUR/USD and GBP/USD drop while EUR/GBP bounces off support.

EUR/USD drops to 20-year lows post Fed 75-basis point rate hike

EUR/USD’s slide from its mid-September peak at $1.0198 has taken it to levels last seen in October 2002 following the Federal Reserve (Fed) 75-basis point (bp) hike on Wednesday and its hawkish stance leading to expectations of another 125-bp rise over the next couple of meetings.

With the US dollar surging, EUR/USD slid to near 20-year lows with the breached one-month resistance line at $0.9756 representing a possible short-term downside target. Key support sits between the June 2000 and January 2001 highs and the September 2002 low at $0.9698 to $0.9593.

Minor resistance above the 6 September trough at $0.9865 remains to be seen between the late August low at $0.9901 and the 16 September low at $0.9946.


EUR/GBP bounces off minor support ahead of BoE rate decision

Last week’s EUR/GBP rally to above the £0.8722 June and early September peaks as UK retail sales showed their biggest decline so far this year by sinking by 1.6% month-on-month (MoM) compared to a rise of 0.4% in July, has taken the cross to levels last traded in February 2021 at £0.8787 before slipping back to its previous minor resistance, now minor support, at £0.8721 on Wednesday.

From there the cross is currently attempting to recover ahead of Thursday’s anticipated Bank of England (BoE) 50-bp rate hike with perhaps even 75-basis points being seen.

Above last week’s high at £0.8787 lies the £0.8797 early February 2021 high which will remain in sight while the currency pair stays above Wednesday’s low at £0.8712 on a daily chart closing basis. If £0.8712 were to give way, however, the July high at £0.8678 would be back in the picture.


GBP/USD sells off to new 37-year low

Following the Fed’s widely anticipated 75-bp rate hike on Wednesday - taking US interest rates to a 14-year high - and a continued aggressive hawkish stance, GBP/USD sold off to yet another 37-year low on the back of a stronger greenback ahead of Thursday’s BoE meeting and anticipated 50-bp rate increase.

The pound sterling is trading at levels last seen in 1985, but interestingly enough is temporarily holding along its June-to-September support line at $1.1212. Below it lies minor support around the psychological $1.10 mark and much further down major support at the 1985 low at $1.0345.

Any short-term bounce is expected to encounter resistance at the $1.1351 mid-September low in the first instance and then at the 7 September low at $1.1406. While the last reaction high on the daily chart at $1.146 caps, immediate downside pressure is expected to remain in play.

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