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

The dollar comes under pressure despite early gains, with the initial weakness for European currencies giving way to a resurgence despite the Italian referendum result.

Euro and dollar notes
Source: Bloomberg

EUR/USD rebounds after initial weakness

EUR/USD has seen sharp devaluation at the open, with the Italian referendum result heightening fears of yet another crisis in the eurozone. However, the pair is back on the attack, with a sharp appreciation looking to close the weekend gap.

Ultimately we need to see an hourly close above the $1.0686 level to start to look more bullish. Otherwise, there is a chance we could be seeing a short-term recovery before we move lower once more.

GBP/USD looks set for further gains

Despite weakness at the open, GBP/USD is back in the ascendancy as it seeks out the early high of $1.2738. The pair has enjoyed a particularly strong start to December, yet price is now moving closer to the crucial $1.2796 resistance level (July 2016 low). That represents a significant challenge to the recent rally.

As such, a bullish outlook remains, with an hourly close above $1.2738 providing a signal that another leg higher could be upon us. However, watch out for notable resistance at $1.2796. This bullish outlook would be negated with an hourly close below $1.2656.

USD/JPY breaking higher from wedge formation

USD/JPY is seemingly in the process of breaking higher from a recent period of weakness, with price breaking through trendline resistance. The key here is the ability to post an hourly close above ¥114.21, which would provide a strong bullish signal.

Given the wider uptrend over recent weeks, this bullish sentiment would coincide with a wider picture. However, a break below ¥113.34 would mark a continuation of recent weakness.

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.