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

The dollar’s ascendancy seems to have come to a halt as we start 2017. However, is this just a fleeting move or indicative of something more long-lasting?

US and Canadian dollars
Source: Bloomberg

Will EUR/USD sell-off last?

EUR/USD has seen significant selling to kick off 2017, falling 0.9% since yesterday’s open. The break below $1.0462 in December seemed to highlight the potential for a sharp deterioration in January. However, the rally back above that level brings the possibility of a resurgence.

With that in mind, the bearish outlook comes back into play with a break back below $1.0372. Until then, there is still a very real possibility of a rebound, and with the pair now trading below the 76.4% pullback, this seems like an interesting area for bulls. 

Does the GBP/USD rebound have legs?

GBP/USD has been gaining ground in the final week of 2016, with the pair crucially breaking through the $1.2302 resistance level. Given that creation of a new high, there is a chance we are seeing a resurgence for the pair.

Watch out for trendline support close to current price, with a break below $1.2200 required to negate any bullish intent created by last week’s rally. 

USD/CAD trending lower once more

USD/CAD has been weakening over the past five trading days, in what looks like a market turning towards the lower end of an ascending channel which has been in place for eight months.

With that in mind, further downside is expected, with a move back below C$1.3388 pointing towards a return to the C$1.3323 region. This bearish outlook remains in play unless we see a break back above C$1.3457, which would bring a more neutral view.

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

All trading involves risk and losses can exceed deposits. Trading CFDs may not be suitable for everyone so please ensure that you fully understand the risks involved. All trading involves risk and losses can exceed deposits.