Skip to content

CFDs are complex financial instruments and come with a high risk of losing money rapidly due to leverage. 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 financial instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.

FX levels to watch – EUR/USD, GBP/USD, AUD/USD

European currencies seem to be underperforming, with EUR/USD and GBP/USD threatening to push lower. Meanwhile, AUD/USD is attempting to break higher following a double bottom formation.

Forex
Source: Bloomberg

EUR/USD continues to stall at key support

EUR/USD continues to trade sideways above the $1.0851, in what looks like a possible precursor to a strong move lower. A break and close below $1.0851 would provide greater confidence that we are going to see the next medium term retracement come to fruition for the pair. That would point towards a potential move into the likes of $1.0785 (50%), $1.0734 (61.8%) or $1.0671 (76.4%).

Until then, there is a chance that with an hourly close above $1.0893 we could retrace into $1.0950 region before turning lower once more. 

GBP/USD could be heading towards retracement phase

GBP/USD sold off sharply yesterday, following the Bank of England (BoE) meeting. This brought the price back into the 76.4% retracement, with the price subsequently moving higher.

However, those gains were negated by this morning’s subsequent sell-off, which is threatening to push below yesterday’s low of $1.2849. Ultimately, we would need to see an hourly close below $1.2831 to provide a bearish signal. Given the gains we have seen over recent weeks, such a signal would likely pave the way for a protracted move lower towards the wider Fibonacci retracements of $1.2677 (50%) or $1.2603 (61.8%). However, first we would need to take out the $1.2831, and until that happens there is still a good chance that this recent uptrend will kick in again.

AUD/USD challenging double bottom neckline

AUD/USD has been confounding the European markets this morning, with the price moving back through the key $0.7395 level. That marks the neckline of a double bottom. An hourly close above that level would look likely to pave the way for a more protracted move higher for the pair.

Yet, with a wider downtrend in play, any such move would likely be short-term in nature rather than indicative of a long-term reversal.

This information has been prepared by IG, a trading name of IG 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. 

CFDs are a leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your initial deposit, so please ensure that you fully understand the risks involved.

Find articles by writer