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 and GBP/USD

EUR/USD and GBP/USD both see sharp selling to end the week, yet with EUR/USD at a critical support level, a break below here would point towards significant downside to come for both.

IG Analyst

Publication date : 2018-08-03T09:27:32+0100

GBP

Source: Bloomberg

EUR/USD falls into critical breakout support level

EUR/USD seemingly left behind the triangle formation of old, instead focusing on the two key breakout points of $1.1745 and $1.1575. It is the latter which is now coming into question, with a break below this level pointing towards a potential bearish extension from here.

With that in mind, watch for how EUR/USD reacts at this level as a determinant of future price action. An hourly close below $1.1575 would point towards a bearish breakdown from here. Otherwise, watch for a potential rebound to continue the wider consolidation that has been in place over the past month.

EUR/USD chart

EUR/USD chart

EUR/USD chart

GBP/USD breaking lower from retracement

GBP/USD been selling off relatively consistently since the rally into the 76.4% retracement last week. This points towards a continuation of the wider downtrend, with a fall below $1.2958 likely before long.

The intraday head and shoulders pattern completed this week also adds greater credence to the bearish picture. As such, further downside looks likely from here, with a rally through $1.3173 required to negate this bearish view.

GBP/USD chart

GBP/USD chart

GBP/USD chart

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