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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.

FX levels to watch – EUR/USD, GBP/USD, NZD/USD

Short-term weakness for the likes of GBP/USD and EUR/USD could provide buying opportunities given recent uptrends, yet do these recent recoveries have legs?

Euro and dollar notes
Source: Bloomberg

EUR/USD falling back within 2017 uptrend

EUR/USD has been turning lower ever since the sharp rally on the final day of January, with the pair retracing the ascent from $1.0620. Despite this short-term weakness, there is still a good chance we will see the pair turn higher in accordance with the trend seen over the past month.

A break back below $1.0620 would negate that trend, and until then there is a possibility we will soon turn higher once more. There is still a chance the current ascendancy represents a retracement of the fall from $1.0874. However, with price running, so far, above the 76.4% retracement, this is becoming less likely. A break above $1.0874 would provide a bullish medium-term view.

GBP/USD break towards double top neckline

GBP/USD has dropped below the 76.4% retracement this morning, following a sharp decline on Thursday. The double top neckline of $1.2412 is crucial here, with an hourly close below that level providing a bearish view.

Until that happens, there is a decreasing chance of a bounce in line with the uptrend evident over recent weeks.  

NZD/USD back to triangle top

NZD/USD has returned to the top of its symmetrical triangle formation, with the pair proving indecisive around the crucial trendline resistance zone.

Over the short-term, there is a good chance we could see the pair fall back once more. However, for a directional breakout, we will be looking for an hourly close below $0.7243 or above $0.7337.

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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