News and Trade Ideas (CURRENCIES)

[MongiIG]

Dollar likely to weaken across EUR/USD, GBP/USD and USD/JPY

Dollar weakness looks likely to come back into play as EUR/USD and GBP/USD turn higher. Meanwhile a four-decade high for Tokyo inflation brings expectations of further USD/JPY weakness.

Source: Bloomberg

 

 

 Joshua Mahony | Senior Market Analyst, London | Publication date: Friday 27 January 2023 

EUR/USD consolidating as we await the next leg higher

EUR/USD has been grinding higher over the course of the past month, with the price rising into a nine-month high yesterday. Notably, the pair has been remarkably consistent despite periods of both strength and weakness in equities. Yesterday brought a whole raft of US data, with initial claims, gross domestic product (GDP), and durable goods bringing hopes that we could yet see a soft landing despite the sharp increase in interest rates.

However, for EUR/USD, the story remained the same, with the four-hour pattern of higher highs and higher lows bringing expectation of further upside to come.

A break back below the $1.0766 swing-low would be required to bring a wider pullback into play. Until then, further upside seems likely from here.

Source: ProRealTime

GBP/USD returns to key 1.2447 resistance

GBP/USD spent the early part of the week losing ground from the key $1.2447 resistance level, with the prior high representing the intraday turning point for the pair.

However, the latter part of the week has seen us return to that same area, with today’s early declines coming from that same region. With this in mind, it makes sense to await a break through $1.2447 to bring a bullish continuation signal for the pair.

Until then, there is always a risk that the price turns lower from resistance once again. To the downside, a break below $1.2263 would be required to complete an intraday double top formation.

Source: ProRealTime

USD/JPY likely to turn lower as Japanese inflation pushes higher

USD/JPY has been on the rise of late, with the pair reversing some of the losses seen earlier in the month. However, overnight data out of Japan highlights the risk of another turn lower here, with the leading Tokyo core consumer price index (CPI) rising to a four-decade high of 4.3%.

That upward trajectory for prices does stand in stark contrast to the declines seen in US inflation. The pressure this creates on the Bank of Japan (BoJ) does bring the potential for further unwinding of the long USD/JPY trade that dominated much of last year. Instead, we now have a clear pattern of lower highs and lows.

As such, this recent rebound looks to represent a retracement phase before the pair turns lower once again. That bearish outlook holds unless price breaks up through trendline and ¥1.3477 resistance.

Source: ProRealTime

[MongiIG]

EUR/USD and EUR/GBP/USD appreciate while GBP/USD range trades

Outlook on EUR/USD, EUR/GBP and GBP/USD ahead of this week’s Fed, ECB and BoE rate decisions.

 Axel Rudolph FSTA | Senior Financial Analyst, London | Publication date: Monday 30 January 2023 

EUR/USD recovers from last week’s low

EUR/USD is seen bouncing off Friday’s low at $1.0838 ahead of this week’s plethora of central bank meetings by the likes of the US Federal Reserve (Fed) which is expected to hike its rates by 25-basis points, the European Central Bank (ECB) and the Bank of England (BoE) which are likely to raise their rates by 50-basis points (bps) respectively.

The currency pair thus remains on track to reach the late April 2022 high and the 50% retracement of the 2021 to 2022 descent at $1.0936 to $1.094 while it stays above Friday’s $1.0838 low on a daily chart closing basis. A drop through $1.0838 would engage the mid-January $1.0766 low. While above it, and the mid- to late-December highs at $1.0736 to $1.0715, the medium-term uptrends remain intact. Above $1.094 lies the psychological $1.10 mark. Further support can be found around $1.0663 to $1.0658, the 16 to 28 December highs.

Source: IT-Finance.com

EUR/GBP bounces off December-to-January uptrend line

EUR/GBP revisited but then bounced off its December-to-January uptrend line at £0.8763 while awaiting Thursday’s ECB and BoE rate decisions, with both central banks expected to hike rates by 50 bps.

While £0.8763 underpins, the £0.8828 November peak as well as the £0.8834 - 22 December high - will be back in play, above which sits more significant resistance which can be spotted between the December and current January highs at £0.8877 to £0.8897. Only a slip through £0.8763 would engage the 55-day simple moving average (SMA) at £0.8735 and current January low at £0.8722. If slipped through, the 23 November high and 19 December low at £0.8701 to £0.8691 could once again be reached. Further down sits the 28 November high at £0.8676.

Source: IT-Finance.com

GBP/USD continues to range trade below its $1.2446 December high

GBP/USD’s September advance from its $1.0350 all-time low struggled to overcome its December high at $1.2446 early last week and has been trading in a sideways trading range below this high ever since while awaiting Thursday’s UK central bank decision.

This is not to say that the cross might not eventually rise to above its December and January highs at $1.2446 to $1.2448, provided that the 24 January low at $1.2263 doesn’t give way.mWere this to happen, the 9 January high at $1.221 may be reached. A rise and daily chart close above last week’s $1.2448 high would engage the minor psychological $1.2500 mark, above which the 7 June 2022 high can be found at $1.2599.

Source: IT-Finance.com

[MongiIG]

EUR/USD and GBP/USD fall back while USD/JPY rallies, as investors await central bank decisions

The dollar has recovered to an extent this week, but the uptrends in EUR/USD and GBP/USD, along with the downtrend in USD/JPY, remain intact for now.

 Chris Beauchamp | Chief Market Analyst, London | Publication date: Tuesday 31 January 2023 

EUR/USD continues to drop back from recent high

A modest pullback continues here with EUR/USD, eating into gains made since the beginning of the year.

As markets brace themselves for a double hit of a Federal Reserve (Fed) and European Central Bank (ECB) meeting within a 24-hour period, EUR/USD has fallen back somewhat from the eight-month highs it reached last week. This is the first real weakness since the first week of January, and would leave the uptrend intact unless we see a move back below $1.04.

If the price recovers above $1.05 then the bullish view is arguably intact and a bounce back towards $1.09 and higher may well develop.

Source: ProRealTime

GBP/USD stalls at December high

Weakness here with GBP/USD has seen the price falter at a similar level to early December, with a possible negative divergence in the daily moving average convergence/divergence (MACD) sending a cautionary signal for bulls.

Just as EUR/USD traders have to deal with the Fed and ECB decisions within the same 24-hour period, cable traders must cope with the Bank of England (BoE) decision following hard on the heels of the Fed’s. Much thus depends on that period for the next move in GBP/USD, though it will still arguably take much steeper losses to reverse the broadly bullish outlook.

For that to happen we would need to see a drop below the 50-day simple moving average (SMA), followed up by a fall below the 200-day SMA. Having failed to establish a higher high, and with the MACD negative divergence a risk, the uptrend could come under pressure. A reversal above $1.24 would put the buyers back in charge.

Source: ProRealTime

USD/JPY edges up

The greenback in USD/JPY has seen a modest recovery off its January lows, as the Bank of Japan (BoJ) dials down any hint of hawkish rhetoric.

Nonetheless, the downtrend is still firmly placed. A move back above the 50-day SMA to suggest perhaps some further short-term strength, but the mid-December high around ¥134.00 would act as a barrier.

Sellers will be looking for a fresh reversal that puts a move back to the January lows in play, and then sees a move below the May 2022 low around ¥126.50.

Source: ProRealTime

[MongiIG]

EUR/USD, EUR/GBP and GBP/USD rally post US Fed 25 bps rate hike

Technical analysis on EUR/USD, EUR/GBP and GBP/USD within their fundamental context.

 Axel Rudolph FSTA | Senior Financial Analyst, London | Publication date: Thursday 02 February 2023 

EUR/USD surges to ten-month high on 25 bps Fed rate hike

EUR/USD rallied to a ten-month high and broke through the psychological $1.10 barrier for the first time since April 2022 as the US Federal Reserve (Fed) raised the fed funds rate by 25 basis points (bp) to 4.50% to 4.75% and its chairman Jerome Powell mentioned the word “disinflation” several times in his comments, leading to a rebound in risk appetite and a weaker US dollar.

The cross now trades around the $1.10 mark with the November 2021 low and the March 2022 high at $1.1185 being in focus, as well as the 200-week simple moving average (SMA) at $1.1226 and perhaps even the 61.8% Fibonacci retracement of the 2021-to-2022 bear market at $1.127.

Slips should find support between the late April 2022 high and the 50% retracement of the 2021 to 2022 descent as well as last week’s high at $1.094 to $1.0929. While Tuesday’s low at $1.0802 underpins, the medium-term uptrend remains intact.

Source: IT-Finance.com

EUR/GBP is gunning for its £0.8897 mid-January high

Earlier this week EUR/GBP revisited but then rallied off its December-to-January uptrend line at £0.8763 whilst awaiting Thursday’s European Central Bank (ECB) and Bank of England (BoE) rate decisions with both central banks expected to hike rates by 50-bp later today.

The January high at £0.8897 is currently being revisited, a rise above which would lead to levels last traded in September 2022 being reached with the minor £0.90 mark being targeted.

Minor support below the £0.8877 December high is to be found around last week’s £0.8852 high. While Wednesday’s low at £0.8817 underpins, immediate upside pressure should be maintained.

Source: IT-Finance.com

GBP/USD has the $1.2446 December high in its sights

GBP/USD is once more heading up towards the December high at $1.2446 as traders await to hear by how much the BoE will raise rates today with the market anticipating a 50-bp hike to 4%.

On the way up resistance can be spotted between the December and late January highs at $1.2431 to $1.2448. If overcome, the $1.25 mark would be next in line.

Strong support remains to be seen between the late January and early February lows at $1.2272 to $1.2263 as well as along the September-to-February uptrend line at $1.2232.

Source: IT-Finance.com

 

[MongiIG]

EUR/USD, GBP/USD and USD/JPY head lower after central bank volatility

This week has seen risk-off sentiment dominate the FX market, with EUR/USD and GBP/USD falling back towards Fibonacci support. Meanwhile, the USD/JPY downtrend looks to finally kick in once again.

 Joshua Mahony | Senior Market Analyst, London | Publication date: Friday 03 February 2023 

EUR/USD turns higher from Fibonacci support

EUR/USD has managed to maintain its consistent uptrend despite the central bank fuelled volatility seen over the course of this week.

Today brings a final hurdle to overcome in the form of the US jobs report, with the last pullback bringing a potentially advantageous location to look for longs in EUR/USD. With the price having dropped into a deep Fibonacci retracement level over the course of the past 24 hours, this is a notable area where the bulls could come back in to maintain the bullish trend.

With that in mind, long positions remain in favour unless we see the price fall back below the $1.0802 swing low.

Source: ProRealTime

GBP/USD reverses back towards Fibonacci support

GBP/USD has been hit hard over the past 24 hours, with the pound particularly coming under pressure in the back end of this week. While that decline has been relatively convincing in terms of momentum, the wider bullish trend remains in play.

The pullback into the 76.4% Fibonacci support level of $1.2172 highlights the potential for a bullish turnaround from here. As such, keep an eye out for how the pair respects this Fibonacci level, with a break below that point signalling the potential for a continuation of this decline towards the key $1.2086.

Meanwhile, watch out for a move up through the 80 threshold on the stochastic oscillator as a signal that the bulls are coming back into dominance.

Source: ProRealTime

USD/JPY breakdown points towards further downside

USD/JPY has finally given way after a period of consolidation that took the price up towards trendline resistance.

The ability to maintain that wider bearish trend brought expectations of another leg lower, which appears to be in the offing. The decline through $1.2902 support brings an end to the recent trend of higher lows seen earlier this week.

As such, we appear to have set in motion a potential fresh bearish phase, with a negative outlook holding as long as the price does not rise up through the $1.3055 resistance level established on Monday. Until that happens, the bears look likely to remain in charge.

Source: ProRealTime

[MongiIG]

EUR/USD and GBP/USD are topping out while EUR/GBP rallies

Outlook on EUR/USD, EUR/GBP and GBP/USD as traders re-access last week’s Fed, ECB and BoE rate hikes and exceptionally strong US unemployment data.

 Axel Rudolph FSTA | Senior Financial Analyst, London | Publication date: Monday 06 February 2023 

EUR/USD is seen topping out

EUR/USD’s rally to its ten-month high at $1.1033 came to an abrupt end last week as the US dollar regained some of its recent losses on the back of the US Federal Reserve’s (Fed’s) 25-basis point rate hike, with the fed funds rate rising to 4.50%-4.75%, and much stronger-than-expected non-farm payroll (NFP) data on Friday.

EUR/USD has since given back over 2% and is fast dropping towards its $1.0766 to $1.0715 support zone, made up of the December highs and mid-January low, despite German factory orders rising by 3.2% month-on-month in December of 2022 versus an anticipated rise by 2% and reversing from a downwardly revised 4.4% tumble in November. The speed and depth of the last few days’ decline in the cross points towards at least a several day and perhaps week-long pause in the EUR/USD medium-term uptrend. A fall through $1.0715 would engage the 55-day simple moving average (SMA) at $1.0661.Resistance can be spotted along the breached November-to-February uptrend line at $1.0827 and above it at the $1.0887 mid-January high.

Source: IT-Finance.com

EUR/GBP is gunning for the minor psychological £0.9000 mark

EUR/GBP’s steep ascent last week has taken the currency pair so far to £0.8978 and thus close to the psychological £0.90 mark which is now in focus as the British Pound is depreciating while the euro remains strong, following last week’s respective 50-basis point rate hikes by the European Central Bank (ECB) and the Bank of England (BoE).

The cross is trading at levels last seen in September of 2022 and may begin to lose some of its recent strong upside momentum around the £0.90 mark. Further up sits the 28 September high at £0.9066.Support can be found around the January high at £0.8897 and then at the £0.8877 December high, ahead of the 25 January £0.8852 high.

Source: IT-Finance.com

GBP/USD slips back to towards the lower end of its two-month trading range

[currencies:GBP/USD’s] recent failure around the December high at $1.2446 has provoked a swift sell-off which is taking the currency pair back towards the lower end of its December-to-February trading range seen between $1.2448 and $1.1841 as the British pound weakens on fears that the UK economy is sliding into recession.

The first downside target is the 200-day SMA at $1.1955, around which the cross may find short-term support. Further down sits the $1.1841 early-January low with resistance being spotted along the 55-day SMA at $1.218.

Source: IT-Finance.com

[MongiIG]

EUR/USD and GBP/USD drop back while USD/JPY bounce stalls

The dollar continues to recover following Friday’s non-farm payrolls, pushing down EUR/USD and GBP/USD while lifting USD/JPY.

 Chris Beauchamp | Chief Market Analyst, London | Publication date: Tuesday 07 February 2023

EUR/USD edges higher off 50-day SMA

A revival of dollar strength has seen the uptrend in EUR/USD take a knock.

The price has retreated swiftly over the past three sessions towards the rising 50-day simple moving average (SMA), setting up a possible higher low if a rebound develops. This then reinforces the bullish view and puts a move back to $1.10 into play.

Continued losses below the 50-day SMA would then target the early January low around $1.05.

Source: ProRealTime

GBP/USD decline slows

Price action here with GBP/USD has seen the pair drop back below the 50-day SMA, and with a second failure to break the $1.24 level in two months now in a more bearish view may start to prevail.

If the 200-day SMA is lost then the January low around $1.187 is possible support, followed up by $1.18 itself.

Below this a more bearish view begins to take hold, and suggests a reversal of the gains made since the end of September.

Source: ProRealTime

USD/JPY drops back from 50-day SMA

The week began with fresh gains for USD/JPY after Friday’s recovery, pushing back to the 50-day SMA for the first time since November.

The steady move lower since November has not seen much in the way of a rebound, so now sellers will wait to see how far this bounce goes. Moves higher in December stalled around ¥134.40, so if this can be cleared then the 200-day SMA comes into view.

A reversal back below ¥131.00 could suggest that a lower high has been created, and that a move towards the January lows around ¥127.70 is now in progress.

Source: ProRealTime

[MongiIG]

EUR/USD, GBP/USD and USD/JPY start to reverse recent dollar strength

Dollar gains start to come under pressure, with EUR/USD and GBP/USD turning upwards as USD/JPY rolls over.

 Joshua Mahony | Senior Market Analyst, London | Publication date: Wednesday 08 February 2023 

EUR/USD finds support on inside trendline

EUR/USD has managed to stabilize despite yet another reminder from Jay Powell that he plans to raise rates further in the wake of an impressive payrolls figure on Friday. The recent decline has brought about plenty of calls for a top in EUR/USD, but the daily timeframe highlights how this recent move does still remain within a wider uptrend for now.

With the ascending inside trendline and 61.8% Fibonacci support coming into play here, another rebound remains a distinct possibility. Conversely, a move back down below this zone would signal the potential for a continuation of this recent sell-off. Ultimately, we would need to see a break below the $1.0483 swing-low to signal an end to this four-month uptrend.

Source: ProRealTime

GBP/USD turns upward from Fibonacci support

GBP/USD has similarly been under pressure of late, with the price hit hard in latter part of last week. However, we are yet to see the double top formation complete with a break below $1.1841. Instead, the price has started to turn upwards from the confluence of trendline and the 76.4% Fibonacci support level.

Once again, this highlights the potential for a bullish reversal from here, with a break back below the $1.1841 support level required to reestablish the bearish theme that has been playing out over the short term.

Source: ProRealTime

USD/JPY reversing after latest upward retracement

USD/JPY has started to fade the strength seen in the wake of Friday’s US jobs report, with the push up into the 76.4% Fibonacci retracement level at ¥132.99 coming under pressure. The wider downtrend seen over the course of the past three months does remain intact despite calls for a dollar reversal, with a move up through ¥134.77 required to bring that bullish view into play.

Until then, the recent rise looks to have provided another selling opportunity, with yesterday's decline serving to complete a bearish engulfing candlestick pattern that points towards further downside from here.

Source: ProRealTime

[MongiIG]

EUR/USD and USD/JPY hover above this week’s lows while EUR/GBP slips

Outlook on EUR/USD, EUR/GBP and USD/JPY in quiet trading.

Source: Bloomberg

 

Forex United States dollar Euro EUR/USD EUR/GBP Pound sterling

 Axel Rudolph FSTA | Senior Financial Analyst, London | Publication date: Thursday 09 February 2023 

EUR/USD stabilises in low volatility trading

EUR/USD's swift sell-off from last week’s $1.1033 high to this week’s $1.067 low came to a sudden halt as the US dollar rallied on the back of much stronger-than-expected US employment data on Friday.

The cross has been trading in a low volatility range these past few days and is slowly rising on Thursday morning as Germany’s inflation rate rises less than expected. It edged up to 8.7% in January versus 8.6% in December, but below a market forecast of 8.9%. Month-on-Month (MoM) it increased by 1%, reversing a 0.8% decrease in December, when a federal one-off gas and heat payment for all households and small- to medium-sized businesses was introduced and kept inflation at bay.

The 55-day simple moving average (SMA) and Tuesday’s low at $1.0679 to $1.067 now act as support and as long as it holds, a recovery back to the mid-January low at $1.0766 may ensue. Above it sits the late January low at $1.0802. Failure at $1.067 could lead to a slip towards the $1.0574 mid-December low being seen.

Source: IT-Finance.com

EUR/GBP slips back towards late January high at £0.8852 ahead of UK Q4 GDP data

EUR/GBP's three-day slide from last week’s high at £0.8978 is fast approaching the 25 January £0.8852 high, ahead of Friday’s UK Q4 preliminary gross domestic product (GDP), industrial production and trade balance data.

Below it a tentative support line can be found at £0.8809. Immediate resistance sits between the £0.8877 and £0.8897 late December and January highs.

Source: IT-Finance.com

USD/JPY hovers above this week’s low at ¥130.48

The surge higher in the USD/JPY cross on the back of a rallying US dollar - following the 517k jobs created in the US economy - ran out of steam at Monday’s ¥132.90 high, marginally below the 55-day SMA, now at ¥132.75, with it dipping back to Tuesday’s ¥130.48 low, above it has been trading since.

The odds favour further downside being seen as the currency pair remains in a downtrend with the ¥129.52 early January low being eyed on a slip through the 20 December low at ¥130.58 and this week’s low at ¥130.48. Further down the early January low can be spotted at ¥127.23 and lie the late April and May 2022 lows at ¥126.95 to ¥126.36.

Strong resistance above ¥132.90 can be found between the early December low at ¥133.63 and the late December and January high at ¥134.50 to ¥134.77. The medium-term downtrend will remain in play while the latter level isn’t overcome on a daily chart closing basis.

Source: IT-Finance.com

[MongiIG]

EUR/USD, EUR/GBP and USD/JPY stabilise ahead of US CPI data release on Tuesday

Outlook on EUR/USD, EUR/GBP and USD/JPY in quiet trading.

Source: Bloomberg

 

Forex Japanese yen USD/JPY EUR/USD United States dollar Euro

 Axel Rudolph FSTA | Senior Financial Analyst, London | Publication date: Monday 13 February 2023 

EUR/USD dips to one-month low but tries to recover

EUR/USD's swift sell-off from its $1.1033 early-February high has taken it to a one-month low below last week’s $1.067 low amid an appreciating US dollar, pushed upwards by the prospect of still higher US interest rates being seen.

Last week’s attempt of a minor recovery to $1.079 has been followed by further weakness in the currency pair as the US University of Michigan consumer sentiment on Friday rallied to a thirteen-month high of 66.4 in February of 2023, from 64.9 in January, beating market expectations of 65. The cross has thus for the first time since early November slipped below the 55-day simple moving average (SMA) at $1.069 and eyes the early-December high at $1.0595 and the $1.0574 mid-December low.

While the bullish reversal takes EUR/USD above Thursday’s high at $1.079, further downside remains in store. Below this levels lies the previous $1.0715 to $1.0766 support zone, now because of inverse polarity resistance area, made up of the mid- to late-December highs and mid-January low.

Source: IT-Finance.com

EUR/GBP tries to stabilise after five consecutive days of losses

EUR/GBP’s five-day slide from its early-February high at £0.8978 has taken it to last week’s low at £0.8824 from which it is trying to recover, having last week narrowly avoided a recession in the UK as Q4 preliminary gross domestic product (GDP) came in unchanged month-on-month (MoM).

The cross now trades back around its 25 January £0.8852 high and may revisit the £0.8877 late-December high, above which lies the £0.8897 January peak, both of which are expected to act as resistance, should they be reached.

Support below last week’s low at £0.8824 comes in along the January-to-February support line at £0.8822 and then at the 9 January low at £0.8769.

Source: IT-Finance.com

USD/JPY bounces off last week’s low on surprise new BoJ governor nomination

USD/JPY’s slip to a one-week low at ¥129.80 on the back of the surprise nomination of Kazuo Ueda as the next Bank of Japan (BoJ) governor, has been followed by a bullish Hammer candlestick reversal and a rise earlier today towards the 55-day SMA at ¥132.49 ahead of Tuesday’s widely anticipated US consumer price index (CPI) data release.

While the moving average, and more importantly the current February high at ¥132.90 cap, another down leg may be formed. A rise above ¥132.90 would put the major ¥133.63-to-¥134.77 resistance zone on the cards, however. It contains the early-December low and late-December as well as January highs. While it isn’t overcome, the medium-term downtrend will remain in play.

Minor support can now be seen at the 24 January high at ¥131.12.

Source: IT-Finance.com

[MongiIG]

EUR/USD, GBP/USD and USD/JPY all move higher as markets await US CPI figures

The uptrends in EUR/USD and GBP/USD have been given a lift by USD weakness so far this week, but sentiment remains fragile ahead of inflation figures.

Source: Bloomberg

 

Forex United States dollar Japanese yen USD/JPY EUR/USD GBP/USD

 Chris Beauchamp | Chief Market Analyst, London | Publication date: Tuesday 14 February 2023 

EUR/USD bulls hoping for a higher low

After a recovery above the 50-day simple moving average (SMA) yesterday, EUR/USD has seen little movement so far this morning.

The pullback from the late January highs has found some buying pressure around $1.07, with the potential for a higher low and then a move back to $1.10 now building. This would leave the uptrend intact and point towards additional upside.

Sellers will want to see a reversal back towards $1.05 to bolster a more bearish view, potentially ending the recovery in place here since the beginning of October.

Source: ProRealTime

GBP/USD edges up after employment data

Dollar weakness provided GBP/USD with the chance to rally yesterday, but gains over the past week have been capped by the 50-day SMA. Some more gains were seen this morning following the latest UK employment and wage figures.

Should the pair find the strength to move higher, which may come if the dollar weakens post-consumer price index (CPI), then the $1.24 highs from December and January are the obvious first target. Beyond this the May 2022 highs at $1.276 come into view.

A failure to make further gains would see the price drop back to test the 200-day SMA, as it did last week, and then below this the January low around $1.188 becomes the next area of possible support.

Source: ProRealTime

USD/JPY hovers around ¥132.00

USD/JPY's rally from the January lows has seen the price move back above the 50-day SMA, though the downtrend is still in place.

A weaker CPI reading could drive a fall in the dollar, potentially opening the way to ¥127.30 and the January lows. A move below this reinforces the downtrend.

Continued upside would head towards the 200-day SMA, broken to the downside back in mid-December.

Source: ProRealTime

[MongiIG]

EUR/USD, GBP/USD and AUD/USD head lower as the dollar dominates

The dollar has found its feet once again, with EUR/USD, GBP/USD and AUD/USD all reversing lower after months of gains.

 Joshua Mahony | Senior Market Analyst, London | Publication date: Friday 17 February 2023 

EUR/USD falls back towards Fibonacci support

EUR/USD has been losing traction as the dollar comes back into prominence this week. Coming in the wake of a producer price index (PPI) inflation reading that saw the fastest monthly growth in seven-months, we are seeing concerns emerge over how sticky inflation could soon enough see the price declines come to a halt.

Whether that occurs or not remains to be seen, but there are clear concerns that are driving the dollar higher. For EUR/USD, we can see that the wider uptrend could come back into play here, with the price approaching the 76.4% Fibonacci retracement of the $1.0483 to $1.1033 rally.

A move that respects that $1.0613 level would bring greater confidence that we are going to see the pair turn higher. However, a move through that Fibonacci support level would signal the potential for a wider bearish phase to come into play.

Source: ProRealTime

GBP/USD collapse continues despite improved retail sales figure

GBP/USD has been hit hard since the recent inflation figure that showed a quickening in the pace of disinflation. That ability to drive down inflation is going to be key for a country that has been widely predicted to have a particularly difficult 2023.

With markets expecting to see the Bank of England (BoE) swiftly reverse course on rates once inflation has been brought under control, the recent consumer price index (CPI) data highlights why GBP has been hit hard. Today has seen a welcome 0.5% rise in monthly UK retail sales, although this has done little to lift the pound. Instead, we have seen a push through 76.4% Fibonacci support following a 61.8% rebound that topped out on Tuesday.

The current sell-off looks likely to take the price through $1.1841, which would complete a bearish double top formation. Thus, keep an eye out for such a break given the bearish implications, while a rise through the recent peak of $1.227 required to signal a more positive picture for the pair.

Source: ProRealTime

AUD/USD looks to have topped out after recent declines

AUD/USD appears to be ahead of the curve here, with the pair falling into a fresh five-week low this morning.

That comes off the back of an appearance from Reserve Bank of Australia (RBA) Governor Lowe, who stated that whilst further hikes be necessary, they hope to start cutting rates in 2024.Something for everyone there. In any case, the dollar dominance appears to be playing out heavily here, with the move through $0.6855 signalling expectations of further downside.

A move up through the recent swing-high of $0.6936 would ease this bearish sentiment somewhat, but bearish positions are favoured until then.

Source: ProRealTime

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EUR/USD, AUD/USD recover during US President Day holiday while EUR/GBP slips

Outlook on EUR/USD, EUR/GBP and AUD/USD as US markets are shut for President Day.

 Axel Rudolph FSTA | Senior Financial Analyst, London | Publication date: Monday 20 February 2023 

EUR/USD recovers from six-week low

EUR/USD is seen bouncing off Friday’s $1.0613 six-week low as investors worried about larger US Federal Reserve (Fed) rate hikes amid rising bond yields and inflation data releases with yields on 10-year and 2-year US Treasury bonds rising to levels last seen in November ahead of Monday’s US President Day holiday.

Because of it little volatility in low volume trading is expected to be seen in EUR/USD on Monday with the 55-day simple moving average (SMA) at $1.0712 being eyed, above which sits the major $1.0736 to $1.0804 resistance zone which is expected to once again cap. It contains the December peak, mid-January low and mid-February high.

Support is seen around the 13 February $1.0656 low which lies above last week’s trough at $1.0613.

Source: IT-Finance.com

Last week’s rally in EUR/GBP is running out of steam

Last week’s EUR/GBP rally ran out of steam at £0.8928 as the United Kingdom (UK) and European Union (EU) try to hammer out a deal on how to resolve the Northern Ireland protocol.

The cross is seen slipping back towards its 25 January £0.8852 high which may offer short-term support. Further down the December-to-February uptrend line can be spotted at £0.8825 while resistance sits at last week’s high at £0.8928.

Below it sits the £0.8897 January peak which is likely to act as resistance on Monday, were it to be revisited at all.

Source: IT-Finance.com

AUD/USD bounces off six-week low in low volume as US is shut for President’s Day

AUD/USD nearly tumbled all the way to its 200-day SMA at $0.6806 before forming a bullish Hammer reversal pattern on the daily candlestick chart on Friday as US yields rose to levels last seen in November and geo-political rhetoric between the USA and China was ratcheted up by the former.

AUD/USD has since rallied amid low volumes as the US is shut for President’s Day with the 14 February low at $0.6922 representing the first upside target, followed by the $0.6983 late January low and the $0.7029 high seen last week. This needs to be bettered for the medium-term uptrend to resume.

Slips should find support around the 6 February low at $0.6856 on Monday.

Source: IT-Finance.com

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Dollar strength bolsters USD/JPY while pushing EUR/USD and GBP/USD lower

Expectations of higher interest rates in the US having driven gains for the dollar, leading to some losses for EUR/USD and GBP/USD.

 Chris Beauchamp | Chief Market Analyst, London | Publication date: Tuesday 21 February 2023 

EUR/USD reverses Friday’s gains

The bulls will continue to be pleased by EUR/USD's ability to hold its ground, despite dropping below the 50-day simple moving average (SMA).

A dip towards $1.06 was met by buying pressure last week, helping to support the view that the pair is currently in a pullback within a broader uptrend. It would need a much steeper decline, below $1.04 to put a real dent in the bullish view.

A recovery above the 50-day SMA would support the bullish view and open the path to $1.10 again, and potentially to a fresh higher high.

Source: ProRealTime

GBP/USD threatens to reverse course

GBP/USD continues to resist a move below the 200-day SMA, helping to hold a more bearish view in check.

While it is true that the buyers have been unable to reassert control, the price has avoided any deeper falls for now. Last week’s failure to break back above the 50-day SMA was a negative development, but could be reversed, which could build a fresh bullish view and open the way for a move back to, and potentially above, the $1.24 area. This was resistance in December and January, so for now it stands in the way of a bigger recovery.

Sellers will need to breach the 200-day SMA to the downside, and then push on below January’s lows around $1.187 to suggest the bearish view has gained renewed traction.

Source: ProRealTime

USD/JPY moves cautiously higher

After the rally on Friday was knocked back, USD/JPY held its ground on Monday, but still lurks in potential lower high territory.

Sellers will want to see a fresh decline below ¥133.00 accompanied by a bearish moving average convergence/divergence (MACD) crossover, to suggest that the downtrend from late October is back in play. This then opens the way to the January lows below ¥128.00.

Further gains towards the 200-day SMA continue to bolster the neutral view, with a medium-term bullish move requiring a move back above ¥138.00 the mid-December highs, at the least.

Source: ProRealTime

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EUR/USD, GBP/USD and USD/JPY continue to be driven by dollar dominance

The dollar looks to continue its ascent, but will the upcoming core PCE inflation data after the February dollar dominance for EUR/USD, GBP/USD and USD/JPY?

Source: Bloomberg

 

Forex Japanese yen United States dollar GBP/USD USD/JPY EUR/USD

 Joshua Mahony | Senior Market Analyst, London | Publication date: Friday 24 February 2023 

EUR/USD declines signal growing confidence of wider reversal in play

EUR/USD has been losing ground over the course of February thus far, with the price taking out each Fibonacci support level one by one. The wider uptrend seen over the course of October-January does highlight the potential for that we are looking at a wider retracement phase here.

However, with the price now having moved through all Fibonacci levels, we are looking increasingly likely to end that wider bullish trend by breaking below the $1.0483. We are still some distance from that level, but it does look likely that this downtrend will continue to play out as the dollar comes back into favour. Today’s core personal consumption expenditure (PCE) inflation data will be key in driving sentiment.

In terms of the price action, the latest leg lower took place off a swing-high of $1.0703. As such, any near-term upside would look a retracement unless we see that $1.0703 level taken out. Until then, bearish positions remain in favour.

Source: ProRealTime

GBP/USD reverses lower following recent rebound

GBP/USD looked to provide us with a potential selling opportunity earlier this week when the price rallied into the 61.8% Fibonacci level off the back of the strong UK purchasing managers’ index (PMI) figures. Ultimately the bullish dollar trend has kicked back in, with expectations of higher for longer rates bringing GBP/USD lower once again.

The subsequent decline still has plenty to play out, with the price currently moving towards the $1.1915 support level. Below that, look for a move down through $1.1915 to continue the downtrend that has been playing out over the course of this month. We would ultimately require a push up through $1.227 to bring an end to this bearish outlook.

Source: ProRealTime

USD/JPY grinds higher on hawkish Fed

USD/JPY has been an interesting case, with the Yen strength brought about via rising Japanese inflation recently being negated by a hawkish shift from the Federal Reserve (Fed). That has brought price up through the ¥134.77 swing-high, signalling the expectation that we could see further upside. With the pair on a relatively slow ascent, we are likely to see significant retracements here.

With that in mind, further upside does look likely but could provide nice deep short-term retracements like the 76.4% pullback seen overnight. Longs are favoured until this intraday pattern of higher lows comes to an end. That means a break below ¥133.92 would be required to bring a more neutral picture into play.

Source: ProRealTime

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EUR/USD, GBP/USD and USD/JPY all move higher

Early trading has seen EUR/USD and GBP/USD build on Monday’s bounce, while USD/JPY continues to push higher.

Source: Bloomberg

 

Forex United States dollar Market trend USD/JPY Japanese yen EUR/USD

 Chris Beauchamp | Chief Market Analyst, London | Publication date: Tuesday 28 February 2023 

EUR/USD moves back above $1.06

Monday’s session saw a recovery in EUR/USD, raising hopes of an end to the pullback from the January highs.

Further evidence of a recovery would be needed, with a move above $1.065 and a bullish moving average convergence/divergence (MACD) crossover signalling a more conclusive higher low that might result in a fresh move higher. This would then bring the $1.10 highs from the end of January into view.

A reversal back below Friday’s lows and then below the early January low just above $1.048 would clearly signal that the sellers retain the upper hand for now.

Source: ProRealTime

GBP/USD bounces off 200-day MA

GBP/USD saw a revival on Monday as well, bouncing off the 200-day simple moving average (SMA) yet again.

This could signal another attempt to clear the 50-day SMA, which has acted as resistance this month. A rally above here is needed to open the way to another test of the $1.243 peaks from December and January.

For the moment, a more bearish view has been kept in check by the 200-day SMA acting as support. A move below this and sub-$1.191 (the late December lows) would then suggest the sellers are in control once again.

Source: ProRealTime

USD/JPY heads towards 200-day MA

USD/JPY's ascent continues, with the 200-day SMA now in sight for the first time since early December.

There still might be a way for sellers to reassert control and create a lower high, but it is looking increasingly likely that bullish momentum will carry the price back higher and above the 200-day SMA. This then points towards a test of ¥138.00 and higher.

Sellers will want to see a reversal below ¥135.00 and a bearish MACD crossover that could yet revive the bearish outlook here and signal a resumption of the quarter four (Q4) 2022 downtrend.

Source: ProRealTime

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EUR/USD slips while USD/JPY rises as greenback appreciates, EUR/GBP rallies post EU/UK trade deal

Outlook on EUR/USD, EUR/GBP and USD/JPY amid rising US dollar and EU/UK trade deal.

 

 Axel Rudolph FSTA | Senior Financial Analyst, London | Publication date: Thursday 02 March 2023 

EUR/USD’s rally is taking a breather as US dollar appreciates

EUR/USD’s rally on stronger-than-expected French and German preliminary consumer price index (CPI) data is running out of puff as the US dollar regains recently lost ground following the publication of US construction and manufacturing data and rising US yields, with the 10-year US treasury yield trading back above the psychological 4% level. The cross is thus slipping back from Wednesday’s $1.0691 high towards the $1.0613 mid-February low.

A fall through the next lower low seen at $1.0566 on Wednesday would call for the resumption of the February descent with the late February low at $1.0533 then being eyed, ahead of the $1.0484 to $1.0444 support area. It consists of the mid-November high, early December and January lows and is expected to hold when reached.

In case of a currently unexpected rise to above Wednesday’s high at $1.691 occurring, the 55-day simple moving average (SMA) at $1.0718 would be in sight.

Source: IT-Finance.com

EUR/GBP surges higher on weakening pound

Over the past few days EUR/GBP rallied strongly on the UK/EU post-Brexit ‘Windsor’ trade agreement to do with Northern Ireland which is pushing the pound sterling lower.

The cross so far rallied to Wednesday’s £0.8896 high, a rise above which seems to be on track which would then open the way for the £0.8928 mid-February high to be reached. Further up sits the early February peak at £0.8978.

Slips should find support between the 24 February high and the 55-day SMA at £0.8836 to £0.8828.

Source: IT-Finance.com

USD/JPY resumes its ascent

USD/JPY’s retest and then bounce off the February-to-March uptrend line on Wednesday has put the 200-day SMA at ¥137.25 back on the cards as the greenback strengthens further. The rise in the cross is taking place despite Japan consumer confidence edging up to a six-month peak and Japan capital spending rising by 7.7% year-on-year (YoY) in the fourth quarter (Q4) of 2022.

Further up lie the December highs at ¥137.85 to ¥138.17 which are also being targeted.

Immediate upside pressure should be maintained while Wednesday’s low at ¥135.26 isn’t being slipped through. Below this level sits the ¥134.77 January high and the 24 February low at ¥134.06. While it underpins, the February-to-March uptrend will remain intact.

Source: IT-Finance.com

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EUR/USD, EUR/GBP and USD/JPY mull over SVB collapse fallout

Outlook on EUR/USD, EUR/GBP and USD/JPY amid the collapse of Silicon Valley Bank and regulators stepping in to quash any further systemic risk.

 

 Axel Rudolph FSTA | Senior Financial Analyst, London | Publication date: Monday 13 March 2023

EUR/USD rises for its third consecutive day following SVB collapse

EUR/USD rises for its third straight session as the US dollar slides amid investors mulling over the prospect of further systemic risk following the collapse of Silicon Valley Bank (SVB) last week, despite the US regulators providing a new lending programme for institutional investors and a $250 000 protection for depositors in order to reassure the financial markets. Share and bond holders will have to take their losses, though.

EUR/USD is now trading in one-month highs, having last week not only broken through the February-to-March downtrend line at $1.0638 but also risen above its last reaction high at $1.0694, confirming at least an interim bottoming formation. The December peak at $1.0736 and mid-January low at $1.0766 are now in focus, a rise above which will have the mid-February high at $1.0804 in its sights. Slips should find support between Monday’s intraday low at $1.0664 and the breached one-month downtrend line, now because of inverse polarity, support line, at $1.0638.

Source: IT-Finance.com

EUR/GBP bounces off minor support

EUR/GBP’s tumble from last week’s high at £0.8925, made near the £0.8928 mid-February high, took it back down towards Friday’s low at £0.8821 before it recovered from the 55-day simple moving average (SMA) at £0.8841 on Monday morning ahead of a speech by momentary committee policy (MPC) member, Dhingra, and Tuesday’s UK unemployment data for January.

The cross has been oscillating around the 55-day SMA for the past couple of weeks and range trading since the beginning of the year with it being expected to continue to evolve within its recent boundaries between £0.8925 and £0.8755. Short-term minor resistance around the £0.8869 mid-February low may be reached above which further resistance sits at the £0.8896 early-March high while support below the 55-day SMA at £0.8841 can be found at Friday’s £0.8821 low and the £0.8804 mid-February low.

Source: IT-Finance.com

USD/JPY resumes its long-term descent

USD/JPY’s advance to last week’s near three-month high at ¥137.91 on diverging monetary policies between the US and Japan seems to have come to an end with the cross failing around the 200-day SMA at ¥137.48 and then sliding through its February-to-March uptrend line at ¥135.90 which may point to the resumption of its long-term downtrend.

A fall through Monday’s ¥133.69 intraday low would push the early February high ¥132.91 and the 55-day SMA at ¥132.46 to the fore. Minor resistance can be encountered at the 1 and 6 March lows at ¥135.26 to ¥135.36 as well as along the breached uptrend line, now resistance line, at ¥135.90.

Source: IT-Finance.com

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Dollar weakness drives up EUR/USD and GBP/USD, while hitting USD/JPY

Changed expectations around the Fed’s next move have prompted the dollar to go sharply into reverse.

 Chris Beauchamp | Chief Market Analyst, London | Publication date: Tuesday 14 March 2023 

EUR/USD stages a recovery

After bottoming out last week EUR/USD has pushed higher, and with the daily moving average convergence/divergence (MACD) turning positive a new higher low could be created.

This would then revive the bullish case following the pullback from the February high around $1.10, and suggest another move back to this level and then potentially higher. This reinforces the uptrend and leaves the bearish view behind for now.

Sellers will need to drive the price back below $1.05, and below the 100-day simple moving average (SMA), to suggest that another push lower is developing.

Source: IT-Finance.com

GBP/USD surges on USD weakness

The past four sessions have seen a potential change in mood for the GBP/USD, as it rebounds back above the 50-day SMA.

After dropping below the 200-day SMA last week, the price has recovered, moving back above the 200-day, followed by the 100- and 50-day SMAs. This has been accompanied by a bullish MACD crossover that could prompt further upside, targeting $1.22 and then the January highs at $1.243.

As with EUR/USD, last week’s lows must be taken out to the downside to cancel out the growing bullish view.

Source: IT-Finance.com

USD/JPY heads back to the 50-day MA

Changing expectations around the Federal Reserve (Fed) policy have driven a reversal for the USD/JPY.

After reaching, and briefly breaching, the 200-day SMA, the pair has fallen sharply, and with a bearish MACD crossover and a lower high in place traders seem to be on the lookout for more losses. Below the 50-day SMA the next target would be the January lows around ¥127.80.

A potential recovery would need a move back above ¥135.00 to then allow for another test of ¥135.00.

Source: IT-Finance.com

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Can the dollar regain lost ground across EUR/USD, GBP/USD and USD/JPY?

Can the dollar regain lost ground after recent losses across EUR/USD, GBP/USD and USD/JPY.

 Joshua Mahony | Senior Market Analyst, London | Publication date: Wednesday 15 March 2023 

EUR/USD pushes through resistance to complete double bottom

EUR/USD has seen sharp gains of late, with markets seeking to reprice the dollar in anticipation of a less hawkish approach from the Federal Reserve (Fed) given concerns in the banking sector.

However, it is also worthwhile noting that there is a possibility that we will see a similar approach at the European Central Bank’s (ECB) this week, with markets still undecided as to whether it will be a 25 or 50 basis point (bp) hike tomorrow. For now, the price has rallied up through the $1.0691 resistance level, completing a double bottom formation that could signal further upside to come.

With that in mind, further upside looks likely. That being said, the strength of this recent move does bring the potential for a retracement, with a break below $1.065 signalling such a pullback coming into play.

Source: ProRealTime

GBP/USD rallies through trendline resistance

GBP/USD has also been on the rise, with the pair push through trendline resistance to establish a new one-month high yesterday.

That brings expectations of further upside, although todays UK budget release could bring volatility for the pair.

With the price consolidating this morning, there is a chance we see the pair retrace some of its recent gains. A break below $1.2046 would signal a significant pullback coming into play. Until then, this current pause looks to be a precursor for another leg higher.

Source: ProRealTime

USD/JPY rally looks likely to fail

USD/JPY has been attempting to regain lost ground overnight, with markets reacting to the latest Bank of Japan (BoJ) minutes which saw the committee discuss further tweaks to the yield curve control policy. With Kuroda on the way out, there is still an element of uncertainty over how things will develop in the face of rising Japanese inflation.

For today, the current USD/JPY rally looks at risk of turning lower before long, with the recent decline looking to signal the continuation of the bearish trend seen in quarter four (Q4) of 2022.

With that in mind, watch out for resistance around the Fibonacci levels, where the price has currently pushed up into the 50% threshold. We would ultimately need to regain the ¥137.91 level to resume the uptrend seen over the past month.

Source: ProRealTime