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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, USD/JPY

The US dollar continues to gain the upper hand in the FX sphere, ahead of the Fed meeting this week.

Euro and dollar notes
Source: Bloomberg

EUR/USD - a bearish development on the way?

It doesn’t seem like there is an abundance of positive momentum in EUR/USD at present. The pair has been treading water for around a month now, with the upward momentum of April and May fizzling out.

As noted yesterday, a move below $1.1109 is the really bearish development, so we will watch today if a bounce can materialise to keep the price off the lows of last week around $1.1172. 

GBP/USD awaiting UK data this week

The drop through $1.2706 is the bearish development that we had been expecting. While UK data this week could rescue GBP/USD, the next area of support to watch would be the $1.2616 area.

A drop below here would raise the prospect of a move down towards $1.24 in the longer term. Bulls need a move back above $1.2775 to indicate that they have managed to wrest back control.

USD/JPY awaiting Fed meeting

There has been a notable recovery in USD/JPY over the past few days, with the possibility that a further rally will recover ¥110.56, the 200-day simple moving average (SMA). Above this, the late May high at ¥111.78 comes into play.

Much will likely depend on the Federal Reserve (Fed) meeting, but those looking for an extension of the 2017 downtrend in USD/JPY will want to see ¥109.50 lost as a prelude to a move back to ¥108.

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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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