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 and USD/JPY

Dollar weakness is dominating this morning, with EUR/USD strength and USD/JPY weakness the dominant force. However, with key breaks for EUR/USD and GBP/USD, will this current upside simply represent short-term rebounds before we move lower yet again?

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.

EUR/USD could fall once again after double top

Following on from the completion of a double top on Wednesday night, EUR/USD has been rallying overnight.

That break below $1.2205 points towards the potential for further downside, with a break above $1.2355 required to negate the possibility that we are simply seeing a retracement before we move lower once again. Until then, a short position in the zone between the 61.8% and 76.4% Fibonacci levels ($1.2278-$1.2308) looks attractive.

GBP/USD breaks below key support

GBP/USD managed to break below the crucial $1.3764 mark on Wednesday night, providing the pair with a lower high and lower low on the wider context.

This points towards further downside to come, with any short-term rebound likely to lead to further downside before long. That being said, we are likely to form a falling wedge pattern, providing a signal that the eventual breakout will come to the upside. A rally above $1.4070 would be required to signal an end to the current downside.

USD/JPY sells off following recent retracement

USD/JPY managed to turn lower from the 76.4% retracement earlier in the week, with the price approaching the ¥105.53 support level.

A break below there would form a new 15-month low. This is likely to be the case, with the downtrend remaining intact. As such, a bearish outlook remains unless we see a move up through ¥107.20.

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.