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CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.

​​Strong rallies in EUR/USD, GBP/USD and swift decline in USD/JPY are likely to pause

​​Outlook on EUR/USD, GBP/USD and USD/JPY following softening U.S. consumer and producer inflation data.

EUR/USD Source: Bloomberg

​​​EUR/USD trades in 17-month highs

EUR/USD's six consecutive days of swift gains on the back of falling US inflationary pressures have taken the currency pair to levels last traded in February 2022.

​The next upside target is the mid-February 2022 low at $1.128 but the cross may lose upside momentum below this level on profit taking ahead of the weekend.

​Potential minor support can be made out around the March 2022 peak at $1.1185 and then much lower down around the $1.1095 April high.

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

​GBP/USD rallies to 16-month high

​When it comes to GBP/USD, weaker-than-expected US consumer and producer price inflation has led to a swift move out of the US dollar which benefitted the British pound with it now trading in 16-month highs versus the greenback at $1.3142.

​If overcome, the December 2021 low at $1.3162 might be reached but around it upside momentum is likely to stall as profit taking towards the end of the week looks probable.

​Minor support probably comes in around the minor psychological $1.30 mark.

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

​USD/JPY finds support after six consecutive days of falls

USD/JPY fell out of bed in the course of this week as US inflationary pressures diminished with the cross dropping to a near two-month low at ¥137.25.

​The low was made marginally above the 200-day simple moving average (SMA) at ¥137.04 before the cross stabilised and headed back up towards the ¥138.44 to ¥138.76 early-June lows.

​Together with the breached March-to-May uptrend line at ¥139.28 these levels are expected to thwart any further upside attempt on Friday.

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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