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/JPY

Sterling is the big loser this week, with political concerns driving the pound lower. Meanwhile, the dollar rally is expected to continue to impact the likes of EUR/USD and USD/JPY.

EUR/USD declines into crucial support level

EUR/USD has continued its declines this week, with the pair falling into the $1.1135 swing low to heighten the chance of further downside.

The wider downtrend of lower highs and lower lows remains in place, pointing towards a break below $1.1112 before long. However, the ability to break out of the recent trend of higher lows was required. We now have that. Watch for whether we can break below this $1.1135 support level or not, with a rebound expected to be a retracement of the decline from $1.1264. It makes sense to watch for the response to this level, with the pair expected to break below this level either now or in the near future.

GBP/USD continues to decline amid political upheaval

UK Prime Minister Theresa May’s time as prime minister looks to be over, and sterling seems to be going down here. Significant market uncertainty means we will likely see further downside to come from here for GBP/USD.

The continued creation of lower highs and lows points towards a downtrend which is expected to continue for some time yet. There is talk of markets selling the rumour and buying the fact, bringing about a chance of a GBP rebound once she goes. However, it makes sense to simply follow the chart rather than speculate. The creation of lower highs remains key here, and thus as long as we remain below the $1.2695 level, a bearish outlook remains in play.

USD/JPY declines beyond trendline, yet bulls wait to pounce

USD/JPY has continued to drift lower over the past two days, with the price falling below trendline support.

However, that does not necessarily negate the uptrend that has been in play on the intraday charts. The creation of lower highs and lows is key here, with a break through the ¥110.36 level key to providing a more bullish outlook for the short term. Be aware that we have a long-term descending trendline up ahead as resistance. However, until we break below ¥109.81, the short term uptrend remains intact.

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.

Start trading forex today

Find opportunity on the world’s most-traded – and most-volatile – financial market

  • Trade spreads from just 0.6 points on EUR/USD
  • Analyse with clear, fast charts
  • Speculate wherever you are with our intuitive mobile apps

See an FX opportunity?

Try a risk-free trade in your demo account, and see whether you’re onto something.

  • Log in to your demo
  • Try a risk-free trade
  • See whether your hunch pays off

See an FX opportunity?

Don’t miss your chance – upgrade to a live account to take advantage.

  • Get spreads from just 0.6 points on popular pairs
  • Analyse and deal seamlessly on fast, intuitive charts
  • See and react to breaking news in-platform

See an FX opportunity?

Don’t miss your chance. Log in to take your position.

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.