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 looks like it could come under some pressure following recent gains. However, with questions remaining, such moves could be temporary in nature.

EUR/USD attempting to establish direction around key resistance

EUR/USD sold off sharply from the $1.1720 region on Friday, with the pair shifting away from a crucial area of resistance. The ability to break through the $1.1746-$1.1790 resistance zone is key in determining whether we are set for a bullish breakout or not.

With the price having turned back towards the $1.1609 swing low, watch for a break below that level as a means to ease back on the recent bullish charge. Alternatively, a failure to break below means that there is a strong likeliness of another push higher to continue the recent recovery.

GBP/USD continues to push upwards

GBP/USD has also retraced, with the pair moving back into trendline support. The recent uptrend points towards another potential shift higher from here, with a break below $1.2979 required to negate this recent rally.

The price is trading within a bearish rising wedge formation, yet it’s worthwhile noting that a breakdown from here is likely to provide a retracement of the rally from $1.2785. However, for now, there is a good chance we will see the market begin to turn higher, in a week that has a host of crucial UK-centric economic releases.

USD/JPY looks set for pullback

USD/JPY is turning lower at the start of the week, with the pair hoping to move into a retracement phase following recent gains. The key level to watch here is ¥111.75, where a break below this level would point towards a move lower. Should we see such a move, a conservative area of support to look for is around the 61.8% to 76.4% retracement zone of the ¥111.11-¥112.17 rally.

However, whether we start a phase of selling depends on the ¥111.75 level, and thus it makes sense to look out for whether we break and hold below that level to determine direction for the short term.

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.

Find articles by writer