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

The US dollar is once again in the ascendancy against the euro and the yen, but a rally in oil is helping the loonie to recover some lost ground. 

Pound and dollar
Source: Bloomberg

EUR/USD eyes 50-day SMA

The pair has returned to the lows of 7 October, pushing down to $1.11 and through the vital September low at $1.1123.

A push through $1.11 would put the pair below the rising post-December 2015 trendline, and could see a test of the August low at $1.1042, or even down to the July low at $1.0950.

Any bounce needs to get back above the 200-day simple moving average (SMA) at $1.1170 and then clear the 50-day SMA at $1.1205. 

EUR/USD

USD/JPY could drop to ¥100

Price action this morning has already seen a dip towards ¥103.75 bring out the buyers, with the uptrend intact. The pair has yet to close firmly above ¥104, and we really need a close above the 2 September high of ¥104.32 to indicate that a breakout is in progress.

A failure to get beyond this level could suggest a return to the 50-day SMA at ¥101.78, or even back down to the August-September lows around ¥100.

USD/JPY

USD/CAD could see further weakness

A sharp rally in crude yesterday put USD/CAD back below the 200-day SMA once again, with the C$1.3200 area still proving to be a major barrier to further progress.

The price has bounced back from the overnight lows, but a failure to move on firmly through C$1.32 likely to suggest further weakness ahead, potentially targeting the 50-day SMA at C$1.3061. 

USD/CAD

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