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

With the dollar index posting a fifth consecutive day of gains, it is clear the greenback is coming back into favour. With EUR/USD, GBP/USD and NZD/USD all gaining ground overnight, will this simply provide an opportunity to go short once more?

IG Analyst

Publication date : 2017-03-02T09:37:02+0000

Euro and US dollar notes

Source: Bloomberg

EUR/USD downside looks set to continue

Yesterday’s late bounce in EUR/USD failed to hold, with price subsequently tumbling once more. Crucially, this takes us back to the historically significant $1.0525 support level, which will be a key hurdle to overcome for further losses to come to the fore.

An hourly close below yesterday’s low of $1.0514 would be very telling here, as that would not only necessitate a break through $1.0525, but also would continue the downtrend instigated earlier in the week. Alternately, an hourly close above $1.0571 would portray a market that could go into a recovery phase. Until then, a continuation of the downtrend remains the preferred option for this pair.

EUR/USD price chart

EUR/USD price chart

EUR/USD price chart

GBP/USD bounce looks to be short term

GBP/USD has tumbled below $1.2347, thus completing a major topping pattern for the pair. Crucially we have moved into the $1.2253-$1.2261 support zone (mid-January lows), which is a hurdle to overcome for further losses.

Current upside looks unlikely to last here, with any rallies into the $1.2347 resistance zone likely to be sold into. As such, unless we create a new higher high, short-term gains are expected to be sold into.

GBP/USD price chart

GBP/USD price chart

GBP/USD price chart

NZD/USD sell-off expected to persist

NZD/USD has been selling off sharply throughout February so far, with yesterday’s break below $0.7130 providing yet another bearish signal. The subsequent rally into the 50% retracement overnight looks like it will resolve downwards once more.

An hourly close below $0.7100 would confirm this retracement is finished and another leg lower is upon us. Until then, as long as price remains below $0.7237, a bearish outlook remains in play for this pair.

NZD/USD price chart

NZD/USD price chart

NZD/USD price 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.