CFDs are a leveraged product and can result in losses that exceed deposits. Please ensure you fully understand how CFDs work and what their risks are, and take care to manage your exposure. CFDs are a leveraged product and can result in losses that exceed deposits. Please ensure you fully understand how CFDs work and what their risks are, and take care to manage your exposure.

Dollar expected to weaken in EUR/USD, GBP/USD and USD/JPY

Dollar expected to come under pressure once more, with EUR/USD, and GBP/USD strength likely to be joined by USD/JPY weakness.

​EUR/USD starts to turn higher after overnight declines

EUR/USD has kicked off the week on a somewhat negative tone, with the pair moving lower to give back some of the gains from last week. With the price failing to break beyond the $1.0921 support level thus far, there is a good chance we could resume the recent bullish trend once more from here.

Watch for a break through the 20-mark on the stochastic to provide a signal that momentum is truly gaining on the bullish side of this trade. A break below the $1.0921 level would negate this bullish outlook and signal a wider pullback coming into play.

GBP/USD pullback could bring bullish reversal

GBP/USD declines seen throughout the final day of the week appears to have set us up for another move lower today, with the price gapping lower and declining into the 200-hour simple moving average (SMA). However, the recent uptrend remains intact given the failure to break below $1.2389 thus far.

With that in mind, there is a good chance we will start to see the bulls come back into play from here, with a break through 20 on the stochastic providing a bullish signal. Conversely, a break below $1.2369 would negate this bullish outlook.

USD/JPY regaining ground, yet wider bearish trend remains

USD/JPY is starting to regain ground following a period of declines for the pair. With the wider outlook clearly bearish, there is a good chance that the current consolidation is a precursor to further downside.

Nevertheless, if we see the price break through the ¥106.93 level, we could be looking at the heightened likeliness of a wider rise coming into play. Until then, there is a good chance of a move lower, with a break below the ¥106.60 level providing greater confidence of that bearish move coming into play.

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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