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

Yesterday’s ADP number was supposed to help the dollar, yet with GBP and EUR remaining resilient, we could be set for gains in EUR/USD and GBP/USD. Meanwhile, USD/JPY's uptrend continues to dominate.

Pound and dollar
Source: Bloomberg

EUR/USD continues to consolidate

EUR/USD is moving higher from the $1.0563 support level once more this morning, with the pair continuing to consolidate. We need to see a break from this range to provide the clues of where the next move will be.

Given the size of the sell-off prior to this range, there is a good chance we could see the market regain some of those losses. However, with a clear downtrend in place there is also a good chance we will see another leg lower.

As such, it makes sense to await a break above $1.0686 or below $1.0525 to gauge the next move. Until then, the range remains relatively consistent and thus could continue to dominate.

GBP/USD trying to break higher

GBP/USD is attempting to break free from its ascending triangle pattern this week, with price pushing above the $1.2532 resistance this morning. Up ahead lies two key resistance levels in $1.2557 and $1.2674, yet the trend clearly appears to be in favour of the pound.

As such, it makes sense to either buy a dip, or else buy an hourly close above $1.2557. We would need to see an hourly close below $1.2420 to negate this bullish view. 

USD/JPY weakness unlikely to last

USD/JPY is turning lower this morning, following on from yet another strong move higher earlier this week. Price is currently finding support at ¥113.80.

The ability to break and hold below that level is key to determining whether we will see a deeper retracement. Should that occur, we would be looking for longs around the ¥112.40-¥112.70 region.

In either case, as long as price remains above ¥111.45, a bullish outlook remains in play.

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.