CFDs are a leveraged product and can result in losses that exceed deposits. Trading CFDs may not be suitable for everyone, so please ensure you fully understand the risks and take care to manage your exposure.

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

The counter Brexit move appears to be slowing, with GBP/USD and USD/JPY in particular trading largely flat. With that in mind, it makes sense to expect a return to trend before long.

CFDs are a leveraged product and can result in losses that exceed deposits. Trading CFDs may not be suitable for everyone, so please ensure you fully understand the risks and take care to manage your exposure.
Dollar and pound
Source: Bloomberg

EUR/USD retracement continues, for now

EUR/USD has been gaining ground over the past week, following on from the Brexit-fueled sell-off. So far we have retraced 50% of that downturn, with price pulling back from that Fibonacci level. From a wider perspective, this rally is likely to have limited legs on it and as such another leg lower seems likely before long.

With that in mind, a short-term bullish view remains in play, yet be on the lookout for bearish reversal signs. The next resistance levels of note are $1.1170, $1.1231 and $1.1306. An hourly close below $1.1072 would provide a bearish signal in line with the wider trend.

GBP/USD continues to consolidate

IN_GBPUSD remains within the very tight range that has been in place since Thursday evening, with a significant degree of hesitancy evident following such a strong deterioration post-Brexit. Given the wider sell-off, coupled with the short-term weakness leading into this current range, it seems most likely that we will see further losses following the breakout.

As such, a bearish view remains in play, especially around the $1.3349 area. This bearish bias holds unless we see an hourly close above 1$.3504. Key support levels of note are $1.3206 and $1.3121.

Panel Title

GBP/USD

USD/JPY range could spark downturn

IN_USDJPY is back into the ¥102.36-¥103.02 range that dominated Thursday’s price action last week. There are two ways to look at the current situation. Firstly, we have not created a new low and are simply seeing a deeper retracement of Thursday’s rally. As such, a bullish view remains in place.

However, it is also possible that we are simply back into a lower range, which could create a second shoulder. Ultimately the key here will be whether we see a significant break and closed candle below ¥102.36. Should that occur, we could swiftly return to the ¥101.40 levels. However, until that happens, it makes sense to remain bullish for the short-term.

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.