Skip to content

We want to clarify that IG International does not have an official Line account at this time. We have not established any official presence on Line messaging platform. Therefore, any accounts claiming to represent IG International on Line are unauthorized and should be considered as fake.
CFDs are complex instruments. 72% of retail client accounts lose money when trading CFDs, with this investment provider. You can lose your money rapidly due to leverage. Please ensure you understand how this product works and whether you can afford to take the high risk of losing money.
CFDs are complex instruments. 72% of retail client accounts lose money when trading CFDs, with this investment provider. You can lose your money rapidly due to leverage. Please ensure you understand how this product works and whether you can afford to take the high risk of losing money.

​​​EUR/USD, GBP/USD and USD/JPY continue to be driven by dollar dominance

The dollar looks to continue its ascent, but will the upcoming core PCE inflation data after the February dollar dominance for EUR/USD, GBP/USD and USD/JPY?

Video poster image

​​EUR/USD declines signal growing confidence of wider reversal in play

EUR/USD has been losing ground over the course of February thus far, with the price taking out each Fibonacci support level one by one. The wider uptrend seen over the course of October-January does highlight the potential for that we are looking at a wider retracement phase here.

However, with the price now having moved through all Fibonacci levels, we are looking increasingly likely to end that wider bullish trend by breaking below the $1.0483. We are still some distance from that level, but it does look likely that this downtrend will continue to play out as the dollar comes back into favour. Today’s core personal consumption expenditure (PCE) inflation data will be key in driving sentiment.

​In terms of the price action, the latest leg lower took place off a swing-high of $1.0703. As such, any near-term upside would look a retracement unless we see that $1.0703 level taken out. Until then, bearish positions remain in favour.

EUR/USD chart Source: ProRealTime
EUR/USD chart Source: ProRealTime

​GBP/USD reverses lower following recent rebound

GBP/USD looked to provide us with a potential selling opportunity earlier this week when the price rallied into the 61.8% Fibonacci level off the back of the strong UK purchasing managers’ index (PMI) figures. Ultimately the bullish dollar trend has kicked back in, with expectations of higher for longer rates bringing GBP/USD lower once again.

The subsequent decline still has plenty to play out, with the price currently moving towards the $1.1915 support level. Below that, look for a move down through $1.1915 to continue the downtrend that has been playing out over the course of this month. We would ultimately require a push up through $1.227 to bring an end to this bearish outlook.

GBP/USD chart Source: ProRealTime
GBP/USD chart Source: ProRealTime

​USD/JPY grinds higher on hawkish Fed

USD/JPY has been an interesting case, with the Yen strength brought about via rising Japanese inflation recently being negated by a hawkish shift from the Federal Reserve (Fed). That has brought price up through the ¥134.77 swing-high, signalling the expectation that we could see further upside. With the pair on a relatively slow ascent, we are likely to see significant retracements here.

With that in mind, further upside does look likely but could provide nice deep short-term retracements like the 76.4% pullback seen overnight. Longs are favoured until this intraday pattern of higher lows comes to an end. That means a break below ¥133.92 would be required to bring a more neutral picture into play.​

USD/JPY chart Source: ProRealTime
USD/JPY chart Source: ProRealTime

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.

Start trading forex today

Trade the largest and most volatile financial market in the world.

  • Spreads start at just 0.6 points on EUR/USD
  • Analyse market movements with our essential selection of charts
  • Speculate from a range of platforms, including on mobile

Find out more

Live prices on most popular markets

  • Forex
  • Shares
  • Indices

You might be interested in…

<h3>How much does trading cost?</h3>
<h3>Find out about IG</h3>
<h3>Plan your trading</h3>

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.