Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. Before deciding to trade foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. You could sustain a loss of some or all of your initial investment and should not invest money that you cannot afford to lose. Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. Before deciding to trade foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. You could sustain a loss of some or all of your initial investment and should not invest money that you cannot afford to lose.

EUR/USD, EUR/GBP and GBP/JPY are all pointing higher

EUR/USD and EUR/GBP near minor resistance while GBP/JPY resumes its ascent.

EUR/USD stalls amid weak German Gfk Consumer Climate

EUR/USD so far remains capped by the 55-day simple moving average (SMA) at $1.0617 after the European Central Banks’s (ECB) annual forum on Monday evening in Sintra, Portugal, and as the German GfK Consumer Climate comes in at -27.4 versus an expected -27.5 and weaker than its previous month’s revised -26.2. Monday’s high and the 55-day SMA at $1.0615 to $1.0617 remain in sight, a rise above which would target the four-month downtrend line at $1.0665.

An immediate bullish bias should remain in play while the cross stays above its one-month uptrend line at $1.0544 and, more importantly, last week’s $1.047 low. Only potential slips below last Wednesday’s low at $1.047 could lead to the 17 June low at $1.0445 being revisited. Below it major support continues to sit at the $1.036 to $1.035 May and current June lows.

EUR/GBP nears last week’s high at £0.8641

EUR/GBP once more flirts with its £0.8618 May high while targeting its £0.8641 high from last Thursday as the UK is bracing for further strikes in several sectors, including barristers, doctors, and airport staff, following last week’s largest ongoing rail strike in 30-years.

Resistance above last week’s high at £0.8641 comes in at the currency pair’s one-year mid-June high and the 200-week SMA at £0.8721. Friday’s low and the three-month uptrend line at £0.8562 to £0.8558 should continue to offer support.

GBP/JPY is expected to continue its advance towards the ¥170 region

The sell-off in the GBP/JPY from its April peak at ¥168.43 seems to have ended at its mid-June low at ¥160.00 with renewed upside having been seen since, as the Bank of England (BoE) is expected to continue raising interest rates and the Bank of Japan (BoJ) sticks to its ultra-easy monetary policy despite rising inflation.

From a technical point of view, a fourth Elliott Wave seems to have been completed at the recent ¥160.00 low, with a final fifth Elliott wave to the upside being in the making. It should take the cross to above its April and current June highs at ¥168.43 to ¥168.73 towards the ¥170.00 zone and above. On the way up, resistance comes in at last week’s high at ¥167.91 while last week’s low at ¥164.66 offers immediate support.

This information has been prepared by IG, a trading name of IG US LLC. This material does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. You should not treat any opinion expressed in this material as a specific inducement to make any investment or follow any strategy, but only as an expression of opinion. This material does not consider your investment objectives, financial situation or needs and is not intended as recommendations appropriate for you. No representation or warranty is given as to the accuracy or completeness of the above information. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. Any research provided should be considered as promotional and was prepared in accordance with CFTC 1.71 and designed to promote the independence of investment research. See our Summary Conflicts Policy, available on our website.

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