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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.

Dollar starts to fade, bringing EUR/USD and GBP/USD upside, while USD/CAD weakens

Dollar strength starts to fade, bringing the chance for EUR/USD and GBP/USD resurgence, while USD/CAD turns lower.

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EUR/USD heading higher after recent pullback

EUR/USD has seen a pullback this week, with the pair seemingly retracing within an ongoing uptrend.

With that in mind, the respect of 61.8% support and subsequent rise through $1.2106 signals the potential end to this retracement. As such, bullish positions are favoured, with a break below $1.1986 required to negate that bullish outlook.

EUR/USD chart Source: ProRealTime
EUR/USD chart Source: ProRealTime

GBP/USD falls into $1.40 handle

GBP/USD has also seen some weakness in recent days, with the price falling back into the $1.40 handle for the first time since Monday's gap through this level.

The wider uptrend does highlight the strong chance that this period of weakness ultimately resolves in another move higher. However, whether we are going to end that pullback at this $1.40 handle, or retrace into the deeper Fibonacci levels remains to be seen. In either case, a bullish view holds unless the price breaks below $1.3801.

GBP/USD chart Source: ProRealTime
GBP/USD chart Source: ProRealTime

USD/CAD expected to turn lower before long

USD/CAD has also seen some dollar strength of late, with the pair pushing into the 50% Fibonacci level yesterday. The wider bearish trend highlights the strong chance that we will ultimately resolve towards the downside.

With the stochastic crossing back out of oversold territory, and the moving average convergence/divergence (MACD) histogram rolling over, it seems momentum is pointing towards that bearish move taking shape from here. In any case, a bearish outlook holds unless the price breaks through the C$1.2351 swing-high.

USD/CAD chart Source: ProRealTime
USD/CAD chart Source: ProRealTime

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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