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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, USD/JPY

Losses continue for EUR/USD, while there seems to be no stopping for USD/JPY. 

USD/JPY notes
Source: Bloomberg

EUR/USD more downside is possible

EUR/USD has suffered two days of heavy losses, and has begun nosing its way through support levels at $1.0950 and $1.09.

Already an overnight rally appears to be losing steam at $1.09, providing further indications that more downside is possible. Key short-term support lies in the area $1.0829-$1.0851, and if this is broken then we may well see a swift move to the rising trendline from the December lows. A recovery above $1.09 would suggest a move back to resistance at $1.10.

GBP/USD awaiting BoE meeting

GBP/USD has been moving tentatively higher, recovering from a dip to $1.2850 last week, but is showing a degree of hesitation around $1.30, with tomorrow’s Bank of England (BoE) meeting and inflation report undoubtedly contributing to the air of caution.

Key support remains at $1.2850 in the event of any turn lower, while below this, the rising March trendline comes into play around $1.27.

USD/JPY pushing higher again

The surge from ¥108 has continued, with USD/JPY pushing on through the descending trendline from the January high. On the daily chart there is now little in the way of resistance before ¥115.50, the high from March and key resistance throughout the first quarter of the year.

Above this, we have a downtrend line that runs back to August 2015, and would suggest momentum would carry the pair all the way to ¥116.50. It would need a move back below ¥113 to suggest that a turn lower is at hand. 

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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.

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