Market News & Analysis

Top Story

Why the EURUSD rally can also extend

In an article published on Monday we outlined the reasons why we thought EURJPY was bottoming and wrote that a break and daily close above 120.00 would be a bullish development looking for a move towards 123.50/124.00.

EURJPY is what is referred to as a cross rate meaning it consists of two currencies, neither of which is the U.S. dollar. When I am reviewing a cross rate I always analyse the charts of the two currencies in isolation.

The easiest way to do this is by examining the chart of each currency against the U.S. dollar. Therefore, for EURJPY, I looked at the charts of the EURUSD and USDJPY separately to make sure my technical view of the individual pairs aligned with my overarching view of the EURJPY cross rate, which they did.

In yesterday's note, we outlined the reasons why USDJPY should extend its recent rally. In this  article we complete our analysis of the currency pairs that make up the EURJPY cross rate with an overview of the EURUSD and why it can continue to rally.

This follows on from our suggestion in Mondays Week Ahead video at the 5 minute and 50 second mark to “buy pullbacks in the EURUSD towards 1.1020/00.”

The reason for our buy recommendation, late last week the EURUSD broke above the downtrend resistance coming from the June 1.1412 high, on the back of a rally in GBPUSD on hopes of an end to the Brexit saga. After falling to a low of 1.0991 earlier this week, the EURUSD received a further boost overnight, closing above 1.1070 following surprisingly soft U.S. retail sales data and supported by a rise in the yield on the German bund.

Technically, the EURUSD now appears set for a run at the 1.1111 high of September, with scope towards the resistance coming from the 200 day moving average at 1.1210. We would use this opportunity to raise the stop loss on longs to 1.0970ish and look to take profit, scaling out at the topside resistance levels mentioned above.

Why the EURUSD rally can also extend

Source Tradingview. The figures stated are as of the 17th of October 2019. Past performance is not a reliable indicator of future performance.  This report does not contain and is not to be taken as containing any financial product advice or financial product recommendation


TECH-FX TRADING PTY LTD (ACN 617 797 645) is an Authorised Representative (001255203) of JB Alpha Ltd (ABN 76 131 376 415) which holds an Australian Financial Services Licence (AFSL no. 327075)

Trading foreign exchange, futures and CFDs on margin carries a high level of risk and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange, futures or CFDs you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss in excess of your deposited funds and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange, futures and CFD trading, and seek advice from an independent financial advisor if you have any doubts. It is important to note that past performance is not a reliable indicator of future performance.

Any advice provided is general advice only. It is important to note that:

  • The advice has been prepared without taking into account the client’s objectives, financial situation or needs.
  • The client should therefore consider the appropriateness of the advice, in light of their own objectives, financial situation or needs, before following the advice.
  • If the advice relates to the acquisition or possible acquisition of a particular financial product, the client should obtain a copy of, and consider, the PDS for that product before making any decision.


This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.

GAIN Capital Singapore Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the GAIN Capital group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), GAIN Capital Singapore Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact GAIN Capital Singapore Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.

In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither GAIN Capital Singapore Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.

GAIN Capital Singapore Pte. Ltd. is not under any obligation to update this report.

Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit for the complete Risk Disclosure Statement.

Important Notice:

Cryptocurrencies are not legal tender currency and trading of derivatives on Cryptocurrencies are currently not covered under any regulatory regime in Singapore. Consequently, investors should be aware they do not have protection under the Securities and Futures Act (Cap. 289). Please ensure that you are fully aware of the risks.