CFDs are a leveraged product and can result in losses that exceed deposits. Trading CFDs may not be suitable for everyone, so please ensure you fully understand the risks and take care to manage your exposure.

FX levels to watch – EUR/USD, GBP/USD and USD/JPY

EUR/USD and GBP/USD are gaining ground, with the dollar starting to weaken once more. However, with USD/JPY rising, there is a good chance that we could soon see the dollar reverse lower against the yen.

CFDs are a leveraged product and can result in losses that exceed deposits. Trading CFDs may not be suitable for everyone, so please ensure you fully understand the risks and take care to manage your exposure.

EUR/USD continues to retrace upwards

EUR/USD is breaking through the $1.1750 resistance level as the market continues to regain ground in the wake of the recent declines.

This upside is likely to persist over the short term, with the price expected to push towards the 61.8% and 76.4% resistance zone in the near future. However, there is also a chance that we will see a wider retracement should the price manage to break above $1.1998. Until then, a short-term bullish outlook remains in play, with an hourly close above $1.1750 pointing towards a continuation of this morning’s strength.

GBP/USD continues to rebound

GBP/USD has been pushing higher since the trendline break at the end of last month, with the pair also heading towards that zone between the 61.8-76.4% Fibonacci retracements.

Once more we have to question whether we are watching a retracement of the sell-off seen over the past month ($1.3618-$1.3204), or else the wider move from $1.4378. For now, further upside looks likely to bring us into the $1.3460 region. However, whether this is a short-term or longer-term retracement, it does look likely that we are watching some form of retracement rather than reversal.

USD/JPY rally unlikely to last

USD/JPY has been gaining ground of late, with the price rallying into the 61.8% level this morning. The drop below ¥108.64 a week ago looks to indicate a potential bearish shift for the market.

This means that we are looking for a bearish reversal for USD/JPY as long as the price remains below the ¥111.39 level. With that in mind, watch for a potential bearish reversal from either this 61.8% retracement, or else the 76.4% Fibonacci at ¥110.62.  

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.