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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 strength likely to drive EUR/USD, and USD/JPY, while GBP/USD fights back

Dollar strength likely to remain key despite recent consolidation in EUR/USD, GBP/USD and USD/JPY.

Dollar Source: Bloomberg

EUR/USD on the slide after rally into key resistance

EUR/USD has been on the back foot following a rally into the prior swing low of $1.1992. That always looked to be a likely retracement before we see the bears come back into play.

Thus the current pullback looks like a continuation of the bearish trend that has been playing out over the past three weeks. A move up through the recent swing high of $1.1952 would bring about a potential wider rebound for the pair. Until then, further short-term declines look likely for this pair.

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

GBP/USD starts to regain ground within consolidation phase

GBP/USD has seen a rare phase of weakness of late, with dollar gains driving the pair out of its intraday uptrend. With wider uptrend still remains intact, pointing towards a potential resurgence before long.

The current consolidation phase is key here, with the latest pullback taking us towards the lower end of the recent range. With that in mind, the bulls are likely to come back into play around these levels.

Be well aware of potential volatility ahead, with the Federal Reserve (Fed) and Bank of England (BoE) both coming into the fold over the space of 24 hours. A break below the $1.3779 level would bring about a fresh bearish outlook. Until then, the consolidation phase looks likely to continue with a near-term push higher.

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

USD/JPY looks to continue uptrend despite after recent consolidation

USD/JPY has been regaining ground overnight, with the pair looking to eventually drive out from this recent period of consolidation.

Given the convincing uptrend seen of late, further upside looks likely before long. As such, a bullish outlook holds unless we see a break back below the ¥108.34 support level.

USD/JPY chart Source: ProRealTime
USD/JPY 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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