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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.

EUR/GBP and USD/JPY both renew their declines

The pound continues its ascendancy over the euro, while the dollar is ending 2020 on a weak note against the Japanese yen.

Euro Source: Bloomberg

EUR/GBP heads down once more

The last day before the end of the transition period finds EUR/GBP declining, continuing the bearish trend of the past two weeks. After finding resistance around £0.915 the price has fallen back towards the 200-day simple moving average (SMA) £0.8992.

As has been the case throughout the month, the pair then bounce from this indicator, drawing a line in the sand for the bears. A move below £0.895 would be needed to clear the area of support seen over the last four weeks. For the moment, trendline resistance from the mid-December high continues to gap any moves to the upside.

EUR/GBP chart Source: ProRealTime
EUR/GBP chart Source: ProRealTime

USD/JPY ends 2020 with more losses

The downtrend of USD/JPY shows no sign of ending. After a brief bounce over the past ten days the price has now headed back to the ¥103.00 lows of the past two months.

Below ¥102.87 the price will create a new lower low, confirming the downtrend. As we have seen over the past few weeks, even modest bounces tend to hit a wall of selling, with little sign of any real upside movement.

USD/JPY chart Source: ProRealTime
USD/JPY chart Source: ProRealTime

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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