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.

Euro rally is starting to lose upside momentum while cable remains bid

The euro’s gains are starting to slow but GBP/USD is holding up well.

​EUR/USD is beginning to run out of steam ahead of resistance 

EUR/USD is still trying to break out of its November-to-January channel but is losing upside momentum along the channel resistance line. 

Upside targets are the October-to-early-November lows at $1.1513 to $1.1539. These are likely to stall the current rally in case it doesn’t run out of puff beforehand. Should this not be the case, the advance may extend to the September low at $1.1563. 

Good support remains to be seen between the late November and December highs at $1.1386 to $1.1383. While above there, an upside bias remains in play. 

EUR/GBP trades along the 55-day simple moving average (SMA) at £0.8352 

EUR/GBP continues to range trade above this year’s low to date at £0.8324 and now flirts with the 55-period SMA on the 240-minute chart at £0.8352 with the £0.8366 to £0.8373 resistance zone capping at present. This comes as no surprise since it has already acted as support late last year and as resistance early this year.  

While the next higher early January high at £0.8418 isn’t exceeded, the longer-term September-to-January downtrend stays valid. 

Only a fall through the recent low at £0.8324 would push the December 2016, April 2017, December 2019 and February 2020 lows at £0.8313 to £0.8277 to the fore. It is where key long-term support can be found. 

GBP/USD continues to trade above the 200-day SMA at $1.3691 

There is no stopping the GBP/USD rally. Once the 23 September high at $1.3751 has been exceeded, the October high at $1.3835 will be targeted. Further up lies the September peak at $1.3913 around which the currency pair is likely to at least take a short-term breather.   

Slips should find support along the 200-day SMA at $1.3691. Further down minor support can be found at the early October highs at $1.3658 to $1.3648. 

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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