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​EUR/USD, EUR/GBP and USD/JPY consolidate ahead of central bank meetings

​​Outlook on EUR/USD, EUR/GBP and USD/JPY ahead of Fed, ECB and BoJ meetings.

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​​​EUR/USD consolidates ahead of central bank meetings

EUR/USD consolidates, having risen by over 8% since the beginning of November, twice close to close to $1.06, and by around 10% from its September 20-year low at slightly above the $0.95 handle, ahead of this week’s central bank meetings by the likes of the US Federal Reserve (Fed) and the European Central Bank (ECB).

​With the two-month uptrend line at $1.053 now having been slipped through, the mid- and late November highs at $1.0496 to $1.0481 are likely to be revisited but may offer support. ​As long as last week’s low at $1.0444 underpins, upside momentum should remain in play with last week’s highs at $1.0584 to $1.0588 remaining in focus.

​Above these, key resistance can be spotted between the 38.2% Fibonacci retracement of the 2021 to 2022 bear market, the 55-week simple moving average (SMA), the late June 2022 high and the March 2020 Covid-19 pandemic low at $1.0608 to $1.0638 but may cap, if reached that is. ​A currently unexpected slip through the $1.0444 last relative low could lead to the 200-day SMA at $1.0353 being retested.

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

​EUR/GBP remains above key support as UK GDP growth tops forecasts

EUR/GBP has once more recovered from its £0.858 to £0.8548 key support area, made up of the mid- to late October and early December lows as well as the 200-day SMA which were revisited on Friday.

​The cross so far stays below its November-to-December downtrend line at £0.8628 as UK gross domestic product (GDP) growth for October came in at a stronger-than-expected 0.5%, the biggest increase in a year, which followed a contraction of 0.6% in September.

​Last and the previous week’s highs at £0.8646 to £0.8675 continue to sit above the downtrend line and while this resistance area caps, further range trading is likely to be seen. ​Only currently unexpected failure at the early December low and at the 200-day SMA at £0.8549 to £0.8548 would put the mid-August high at £0.8512 on the map.

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

​USD/JPY stays above 200-day simple moving average amid higher-than-expected Japanese PPI

USD/JPY continues to trade sideways above its 200-day SMA at ¥135.17 despite producer prices in Japan rising by a higher-than-expected 9.3% year-on-year (YoY) in November, slowing from an upwardly revised 9.4% gain in October but exceeding a forecast 8.9%.

​While Friday’s low at ¥135.61 underpins, a recovery back towards the ¥137.68 to ¥137.85 mid-November low and last week’s high may ensue.

While the cross remains below the late November ¥139.89 high, the October-to-December downtrend remains intact.

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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