FX snapshot – EUR/USD, GBP/USD, EUR/GBP, USD/JPY

US dollar strength continues to drift, sparking EUR/USD strength and USD/JPY weakness. However, dollar strength seems just around the corner.

A man walking by a data board with charts
Source: Bloomberg

EUR/USD tests resistance

The EUR/USD pair has been breaking to a new week’s high overnight, with the price selling off from last week’s $1.0833 support level. With the price currently drifting lower, we are likely to see further downside for the coming hour or so.

Crucially, yesterday’s candle closed on the $1.0808 July resistance level, and we would need to see a break and close above the $1.0808-$1.0833 resistance zone to bring expectations of further upside. With that in mind, the outlook remains bearish unless the price breaks higher. The long-term bearish outlook points towards a move back to $1.052 and $1.0462.

EUR/USD chart

GBP/USD triangle in play

GBP/USD is trading within a symmetrical triangle, with the top marked by the October $1.5241 support level. Trendline and simple moving average (SMA) support (50-hour) is in play to the downside, whereas to the upside we also have trendline and SMA (200-hour) resistance in play. Thus a breakout above $1.5421 would bring likeliness of a move towards $1.5289 and $1.533 resistance levels. Meanwhile, a break and close below $1.517 would bring into play $1.5107 and $1.503 support.

GBP/USD chart

EUR/GBP selling off once more

EUR/GBP is selling off following a brief bounce higher yesterday, with the price marginally breaking higher than the Wednesday swing high of £0.7104. The question is whether we create a new higher low for a strong move higher, or break back below £0.7038 support. A close above £0.7110 would bring a bullish outlook for the early part of next week, with £0.7129, £0.7154 and £0.7197 resistance in view. Alternately, a close below £0.7038 would bring bearish expectations, with £0.7026, £0.7, £0.6951 and £0.6936 key support levels. 

EUR/GBP chart

USD/JPY channels lower

The USD/JPY pair has been channeling lower over the past week, following a strong period of appreciation in the first week of November. Given the trend coming into this current pattern, a bullish breakout seems to be the most likely outcome. Thus a break out of this channel and through the first swing high (currently ¥123.08) would bring expectations of a move back to ¥123.60 and ¥125.28. Until that happens, the channel remains in play and we are likely to continue the drift lower. 

USD/JPY chart

The information 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 Bank S.A. 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 and as such is considered to be a marketing communication.

Find articles by analysts