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. CFDs are complex instruments. You can lose your money rapidly due to leverage. Please ensure you understand how this product works and whether you can afford to take the high risk of losing money.

Weaker dollar lifts EUR/USD and GBP/USD, putting pressure on USD/JPY

The Fed meeting has removed some of the dollar’s strength, allowing EUR/USD and cable to rally, but leaving USD/JPY out in the cold.

EUR/USD recovers its bullish momentum

The EUR/USD pair shot higher yesterday, returning to the $1.117 level from last week. Dips towards $1.112 may well find support, while a breakout above $1.118 would open the way to the 200-day simple moving average (SMA) at $1.12.

A move below $1.104 would be needed to reinvigorate the downtrend.

GBP/USD continues rebound from $1.280

Having found support around $1.28, the GBP/USD pair has now resumed its march higher. The next target is $1.30, and intraday pullbacks may continue to find buyers. Above $1.304 the price heads towards $1.32.

A close below $1.277 is needed to revive a more bearish view, although even then any higher low above $1.22 might be viewed as a buying opportunity.

USD/JPY edges lower

Post-Federal Reserve (Fed) dollar weakness continues, as the USD/JPY price retreats once again from ¥109.00. This may see a retracement towards ¥107.60, which would still leave the price in a strong uptrend from the August lows.

Intraday support has been found around ¥108.30 over the past two weeks, so if this holds a rebound could develop.

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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