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

It looks like we are in for a week focused on the dollar, as the market suddenly wakes up to the impact of Fed speeches. 

Euro and dollar notes
Source: Bloomberg

GBP/USD could see downward move

The dollar currently carries all before it, so we could expect to see further weakness in the pair.

The 50-hour simple moving average ($1.3301) has so far prevented rallies over the past two days from gaining momentum. So while it is rallying now, a drop through Friday’s low at $1.3250 could see a swift move down towards $1.3050, since there is little support available at present between these two levels. 

EUR/USD tries to regain lost ground

Friday’s sell-off caught the euro too, but since hitting $1.12, the pair has climbed doggedly higher. A failure to push on from here could indicate a new lower high off the pre-European Central Bank peak, so the pair needs to push on through $1.1280 and then close above $1.13. A dip could see support at $1.12, Friday’s low, but a close below here opens the way to the 5/6 September lows around $1.1140. 


USD/JPY puts bears in charge

Despite the bounce on Thursday and Friday, the pair has remained below the downtrend line for the year. A further decline today through Friday’s support of ¥102 would indicate the sellers are still in charge, with ¥100 being the next big target.

A bounce through Friday’s high at ¥103 would suggest gains in the direction of ¥104, and indicate the ongoing decline here has run its course. 

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.