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

With clear short-term trends in play, continuation seems to be the order of the day.

EUR/USD forex pair
Source: Bloomberg

EUR/USD downside expected
EUR/USD has been trading sideways following on from Monday’s sell-off. We are yet to see any sign this is over and thus a break and hourly close through $1.0990 would be required to signal a possible next leg lower. Below this, the $1.0967 support level would be crucial to any further losses.

Given the recent downtrend and the gradual lower highs coming into play, a break lower seems most likely, yet until we see that occur, consolidation is likely to resume. 

EUR/USD chart

GBP/USD grinds lower
GBP/USD has resumed its downtrend, with the pair selling off overnight. The last hourly candle posted a doji with a long upper shadow, which indicates an inability to sustain any gains. This points towards further downside to come and as such, another move to the downside seems likely.

This bearish view remains unless we see a move back up above $1.4028. Support is clearly defined at $1.3964, where a closed hourly candle below this level would likely give way to sharp selling for the pair. Beyond that, support levels are hard to come by due to the creation of multiyear lows. Thus be on the lookout for continued lows and lower highs.

A move back above $1.4028 would look towards $1.4057 and $1.4080 as initial resistance. 

GBP/USD chart

USD/JPY expected to fall once more
USD/JPY has been trending within a clear downtrend over the past week, which is a continuation of the sell-off we saw back in January 2016.

The rally seen early this morning has brought us back to the ¥112.30 resistance level and we expect it to be sold into. Thus the bearish view remains unless we see a close back above ¥112.41.

Support levels of note are ¥111.66, 110.99 and ¥110.66. A break back through ¥112.41 would look towards ¥113.05, ¥113.20 and ¥113.37 as the next resistance levels.

USD/JPY chart

USD/CAD breaks lower
USD/CAD has rallied heavily over the past 48 hours, with price moving back above the 50-period simple moving average (4-hour). While this is heavily reliant upon crude prices, there is a clear downtrend in play over the past month and thus another move lower seems likely.

With the stochastic clearly very extended to the upside, momentum seems likely to shift towards a bearish move in the near-term. This bearish view remains unless we see a closed hourly candle above C$1.3847.

Resistance levels of note are C$1.3821, C$1.3847 and C$1.3911. Near-term support levels to watch are C$1.3666 (trendline) and C$1.3639.

USD/CAD 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