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

FX markets show significant hesitancy ahead of tomorrow’s vote, with the EUR/USD and GBP/USD rally coming under pressure as USD/JPY consolidates.

US dollar and Japanese yen
Source: Bloomberg

EUR/USD reversing higher following Draghi sell-off

Mario Draghi practiced his favourite party trick yesterday, once more talking down the euro with reference to further easing. Interestingly, we did not see the $1.1223 level taken out to create a new low and have posted some long legged bullish reversal candles.

With the stochastic oscillator turning in a bullish manner, a rally seems the likeliest option from here, with a significant amount of ground to be made up. Essentially, EUR/USD strength is a Bremain play, which appears to be the trend of recent polls. The bullish view would be negated with an hourly close below $1.1223. Key resistance levels to watch are $1.1300, $1.1350 and $1.1382.

GBP/USD asking questions around key resistance area

IN_GBPUSD managed to rally out of a sharp sell-off yesterday, with the 76.4% pullback being hit on the way down. However, despite this, it is worth being hesitant around current levels, with a crucial resistance zone up ahead.

The $1.4739-$1.4784 resistance area should provide us with a lead for the day, with a break through this zone required to resume this uptrend. Alternately, a break back below $1.4631 would negate this rally, providing a more bearish outlook.

USD/JPY looks to continue rangebound trading

It is clear that sentiment is on a knife-edge as we approach tomorrow’s referendum, with IN_USDJPY largely consolidating over the past week. The clear range (¥103.55-¥104.84) looks likely to continue for now, with further downside to come, as triggered by a closed hourly candle below ¥104.35.

This would create a head and shoulders pattern which if confirmed would provide a target of ¥103.65. The bearish view would be negated with a rally through the top of this range, where a closed candle will be of crucial importance (as highlighted yesterday).

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. See full non-independent research disclaimer and quarterly summary.

CFD’s zijn complexe instrumenten en brengen vanwege het hefboomeffect een hoog risico mee van snel oplopende verliezen. 79% van de retailbeleggers lijdt verlies op de handel in CFD’s met deze aanbieder.
Het is belangrijk dat u goed begrijpt hoe CFD's werken en dat u nagaat of u zich het hoge risico op verlies kunt permitteren.
CFD’s zijn complexe instrumenten en brengen vanwege het hefboomeffect een hoog risico mee van snel oplopende verliezen.