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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

It looks like we are in for some euro weakness, while cable has recovered from election-related jitters. 

Euro notes
Source: Bloomberg

EUR/USD still in a downtrend

Greece worries exploded onto the scene over the weekend, causing a continuation of the short-term downtrend that began last week at $1.1250.

This series of lower highs and lower lows will be preserved unless EUR/USD can move back above $1.1190. If the price fails to make a new higher high, we look to see if it can move below the $1.1110 level. A drop below $1.1080 would likely be the signal for a deeper retracement to $1.10 itself. 

GBP/USD – buyers back in charge?

Last week’s swift drop to $1.2775, the previous key support in late April, seems to have ended. Further gains this morning are pushing GBP/USD back above $1.2846, the high set during Monday’s thin trading.

It looks like the buyers are back in charge, a view that would only be cancelled out with a daily close below $1.28. 

USD/JPY holding at the support zone from ¥110.11 to ¥110.80

The ranging nature of USD/JPY action looks to be resolving in favour of the bears, with a clear series of lower highs since last Wednesday. However, so far the price is being held up by the support zone from ¥110.11 to ¥110.80.

A clear break below here is needed to resolve the impasse, and would open the way to ¥108. A break higher needs a close above ¥112, which would indicate that a new push in the direction of ¥114.37 is underway.

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.

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