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, EUR/GBP and USD/JPY

Both EUR/USD and USD/JPY have been largely consolidating at the start of play, with a government shutdown doing little to hurt the dollar. Meanwhile, the EUR/GBP pair is trading at a crucial support level.

IG Analyst

Publication date : 2018-01-22T09:21:02+0000

GBP

Source: Bloomberg

EUR/USD consolidates around key support level

EUR/USD has been largely consolidating in early trade, with $1.2213 support being respected on a number of occasions. With that level representing both the neckline of a head and shoulders formation, alongside the 61.8% retracement, a break lower could see short-term downside.

However, with the wider trend pointing towards a resurgence for the pair, only a fall back below $1.2165 would bring a more bearish outlook. Until then, this recent sell-off looks like a retracement, with a break higher expected before long. Watch for an hourly close above $1.2257 for greater confidence that we are set to break higher from here.

EUR/USD chart

EUR/USD chart

EUR/USD chart

EUR/GBP back into double top neckline

EUR/GBP has dropped back into the crucial £0.8809 support level to start the week, with this key area playing an important role in determining where we go from here.

Watch for a potential break to the downside from here, with the wider descending channel formation coming into play. That being said, should we break lower from here, it is worthwhile noting the existence of an ascending trendline, dating back to 10 March 2016. Remember, this area is pivotal for the days ahead. As such, should we fail to break lower, it is likely that this will be the point where the price begins to turn higher once more.

EUR/GBP chart

EUR/GBP chart

EUR/GBP chart

USD/JPY gaining ground from Fibonacci retracement

USD/JPY has begun to move higher, following a fall into the 76.4% retracement last week.

The ability to push through ¥111.48 would point towards a wider resurgence and retracement into the ¥112.16 region. Alternately, a break back below ¥110.19 support level would provide a signal that the bearish wider view is set to come back in play.

USD/JPY chart

USD/JPY chart

USD/JPY chart

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.

Find articles by writer

CFDs are complex 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. Professional Clients can lose more than they deposit.

The value of shares and ETFs bought through an IG stock trading account can fall as well as rise, which could mean getting back less than you originally put in. Please ensure you fully understand the risks and take care to manage your exposure.

IG does not issue advice, recommendations or opinions in relation to acquiring, holding or disposing of a CFD. IG is not a financial advisor and all services are provided on an execution-only basis. This communication is not an offer or solicitation to enter into a transaction and shall not be construed as such.

IG is a trading name of IG Limited a company registered at 2702 & 2703 Level 27, Tower 2, Al Fattan Currency House, DIFC, Dubai, United Arab Emirates. IG is authorised and regulated by the Dubai Financial Services Authority (DFSA) under reference No. F001780.

The information on this site is not directed at residents of the United States, Belgium or any particular country outside the UAE and is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.