CFDs are a leveraged product and can result in losses that exceed deposits. Please ensure you fully understand how CFDs work and what their risks are, and take care to manage your exposure. CFDs are a leveraged product and can result in losses that exceed deposits. Please ensure you fully understand how CFDs work and what their risks are, and take care to manage your exposure.

FX levels to watch: EUR/USD, GBP/USD and USD/CAD

The dollar has been under pressure, with EUR/USD and GBP/USD on the rebound. However, with a sharp decline at the turn of the year, is this a precursor to a bullish surge in the dollar?

EUR/USD pushing higher after recent decline

EUR/USD has been falling back over the turn of the year, with the price dropping below the key $1.1305 level. To some extent, that fall into a new lower low could signal the start of a more bearish phase coming into play.

However, with the price having dropped back towards the ascending trendline, it is clear that the wider upward trend could remain in play. As such, there is not a clear-cut bullish or bearish pattern in play here, with arguments for both. As such, watch for a break through $1.1500 to confirm the bullish theme. Otherwise, a bearish turn before that $1.1500 level would start providing signals of a possible next leg lower.

GBP/USD rally looks likely to fall short

GBP/USD has been gaining ground since the drop below $1.2477, with the pair now starting to stall.

That drop into a new low on 2 December highlights a continuation of the wider bearish theme, with the current rally looking likely to falter rather than create a new higher high. As such, watch for a potential bearish shift from here, with a rally above $1.2812 required to negate the wider downtrend.

USD/CAD drops into trendline support

USD/CAD has been on the decline throughout the start of the new year, with the price falling into and below the lower boundary of the ascending channel pattern.

This raises the chances of a wider downturn for the pair, yet with the price currently challenging an ascending trendline, there is a good chance we will see a rebound soon. Thus, it makes sense to watch for a potential rebound from here, with a drop below trendline support providing a bearish continuation signal for the short term.

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.

See an opportunity to trade?

Go long or short on more than 17,000 markets with IG.

Trade CFDs on our award-winning platform, with low spreads on indices, shares, commodities and more.

Live prices on most popular markets

  • Forex
  • Shares
  • Indices

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.

Plan your trading week

Get the week’s market-moving news sent directly to your inbox every Friday. The Week Ahead gives you a full calendar of upcoming economic events, as well as commentary from our expert analysts on the key markets to watch.

For more info on how we might use your data, see our privacy notice and access policy and privacy webpage.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.