CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Please ensure you fully understand the risks involved. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Please ensure you fully understand the risks involved.

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

The dollar has been enjoying a resurgence, with EUR/USD and GBP/USD both selling off sharply. As USD/JPY rises towards trendline resistance, markets will be watching to see if this dollar rally can continue.

EUR/USD falling back from triangle resistance

EUR/USD is turning downwards from trendline resistance this morning, continuing the triangle formation that dates back to the beginning of November.

The sharp decline we are currently looking at is taking us into the trendline support, which underpins this triangle formation. Keep an eye on this trendline as a potential reversal point, where a break below $1.1305 would be required to signal an impending bearish phase.

GBP/USD breaking lower from Fibonacci resistance

GBP/USD is also selling off heavily after reaching the 61.8% Fibonacci resistance level, with the price forming and completing a head and shoulders formation. This points towards a likely breakdown into new lows below the $1.2477 level.

A break back above the week’s highs of $1.2688 would point towards a potential wider 76.4% retracement. So, unless that happens, we are looking for GBP/USD to continue declining in the search of a new lower low.

USD/JPY grinding higher towards trendline resistance

USD/JPY has been pushing higher, moving into the 76.4% Fibonacci level. The pair has been providing lower highs over the past two months, pointing towards a potential bearish reversal coming into play in the near future.

Watch for a break below the most recent intraday swing low, which is currently ¥113.14. Should that occur, we would be looking for another move lower, with the ¥112.23 level coming into view. Only with a rally through the ¥114.03 level would we expect this upward move to have legs.

This information has been prepared by IG, a trading name of IG Markets 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.

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. All share prices are delayed by at least 20 minutes. Prices are indicative only.

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.