Dollar weakness expected for EUR/USD, GBP/USD and USD/CAD
Dollar weakness on the cards, as potential EUR/USD and GBP/USD strength is coupled with expected USD/CAD weakness.
EUR/USD falls into Fibonacci support
EUR/USD has been on the slide over the course of the week, coming off the back of a sharp rally on Friday.
That break higher points towards a potential period of upside to come for the pair, raising the possibility of a bullish reversal from the 76.4% Fibonacci support level which has been respected overnight. A break below the $1.1051 low would bring the wider bearish picture back into play. However, it is worthwhile watching for a potential resurgence from here, with Fibonacci support expected to play a key role in such a recovery.
GBP/USD showing signs of weakness, yet trend still remains for now
GBP/USD saw sharp losses yesterday after UK Prime Minister Boris Johnson limited the time a coalition would have to legislate against a no-deal Brexit.
The growing threat of a disorderly exit from the EU puts pressure on the pound, yet we will also need to keep an eye out for the US gross domestic product (GDP) figure today which is particularly notable given recent fears over a potential impending recession. The four-hour chart highlights the respect of 76.4% Fibonacci support within yesterdays sell-off, with a break below that $1.2156 level needed to bring about greater confidence of a wider pullback. However, we will ultimately need to see a break below $1.2108 to signal a return to the wider bearish trend. To the upside, the price has to break through the $1.231 peak to signal the end of this recent pullback.
USD/CAD reverses lower after Fibonacci retracement
USD/CAD has managed to rally back into the 76.4% Fibonacci retracement following a breakdown below $1.3251 on Monday. That prior breakdown points towards this rally being a retracement and thus the 76.4% Fibonacci level looked a good selling opportunity.
With the price breaking lower, this still looks compelling for shorts, where a break below $1.3287 would bring a new sell signal. Conversely, we would need to see a break through $1.334 to bring about a more bullish picture.
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
Live prices on most popular markets
- Forex
- Shares
- Indices
