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​EUR/USD, GBP/USD and USD/JPY rise further as banking woes abate

​​Outlook on EUR/USD, GBP/USD and USD/JPY as risk-off sentiment abates.

dollar Source: Bloomberg

​​EUR/USD is gradually heading back up again

EUR/USD's sharp fall from last week’s $1.0929 high amid worries surrounding Deutsche Bank’s double-digit fall in its share price, leading to flight-to-quality flows into the US dollar, pushed the cross to Friday’s low at $1.0714, to marginally below the 55-day simple moving average (SMA) at $1.0738, before recovering since.

​Monday’s better-than-expected German income from operations (IFO) business climate data for March helped EUR/USD recover further still with it now trading back above its $1.0804 mid-February high towards last week’s high at $1.0929. The German business climate indicator rose to 93.3 in March - its highest level since February 2022 - versus 91.1 in February.

​Minor support below Monday’s $1.0801 high comes in along the two-week uptrend line at $1.0771 ahead of the 55-day SMA at $1.0738

EUR/USD chart Source: IT-Finance.com
EUR/USD chart Source: IT-Finance.com

​GBP/USD is gunning for last week’s high at $1.2343

GBP/USD has resumed its ascent towards Thursday’s $1.2343 high ahead of US consumer confidence, wholesale inventories, home price and goods trade balance data releases, all out on Tuesday.

​A rise above Thursday’s high at $1.2343 would put the December and January highs at $1.2446 to $1.2448 on the map which represent strong resistance. Support below Friday’s $1.2288 high can be spotted along the one-month uptrend line at $1.2252 which sits right within the 24 January low and mid-February high at $1.2263 to $1.227.

​Only a currently unexpected bearish reversal to below Friday’s low at $1.2191 would void our short-term bullish outlook and put the 55-day SMA at $1.2158 back on the cards.

GBP/USD chart Source: IT-Finance.com
GBP/USD chart Source: IT-Finance.com

​USD/JPY recovers from seven-week low

USD/JPY’s descent amid risk-off sentiment due to the banking crisis last week took it to a seven-week low at ¥129.65 before the cross stabilised as risk-off sentiment abated.

​A speech by the Bank of Japan (BoJ) Governor Haruhiko Kuroda and core Consumer Price Inflation (CPI) coming in at a less-than-expected 2.7% in March versus an expected 3.0% and 3.1% in February also helped USD/JPY recover intraday.

​While Tuesday’s intraday low at ¥130.51 underpins, Monday’s high at ¥131.76 is likely to be revisited, a rise above which would engage the 55-day SMA at ¥132.36. Support below ¥130.51 sits at Friday’s ¥129.65 near two-month low.

USD/JPY chart Source: IT-Finance.com
USD/JPY chart Source: IT-Finance.com

This information has been prepared by IG, a trading name of IG Markets Ltd and IG Markets South Africa Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

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