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

With the dollar index posting a fifth consecutive day of gains, it is clear the greenback is coming back into favour. With EUR/USD, GBP/USD and NZD/USD all gaining ground overnight, will this simply provide an opportunity to go short once more? 

Euro and US dollar notes
Source: Bloomberg

EUR/USD downside looks set to continue

Yesterday’s late bounce in EUR/USD failed to hold, with price subsequently tumbling once more. Crucially, this takes us back to the historically significant $1.0525 support level, which will be a key hurdle to overcome for further losses to come to the fore.

An hourly close below yesterday’s low of $1.0514 would be very telling here, as that would not only necessitate a break through $1.0525, but also would continue the downtrend instigated earlier in the week. Alternately, an hourly close above $1.0571 would portray a market that could go into a recovery phase. Until then, a continuation of the downtrend remains the preferred option for this pair. 

GBP/USD bounce looks to be short term

GBP/USD has tumbled below $1.2347, thus completing a major topping pattern for the pair. Crucially we have moved into the $1.2253-$1.2261 support zone (mid-January lows), which is a hurdle to overcome for further losses.

Current upside looks unlikely to last here, with any rallies into the $1.2347 resistance zone likely to be sold into. As such, unless we create a new higher high, short-term gains are expected to be sold into. 

NZD/USD sell-off expected to persist

NZD/USD has been selling off sharply throughout February so far, with yesterday’s break below $0.7130 providing yet another bearish signal. The subsequent rally into the 50% retracement overnight looks like it will resolve downwards once more.

An hourly close below $0.7100 would confirm this retracement is finished and another leg lower is upon us. Until then, as long as price remains below $0.7237, a bearish outlook remains in play for this pair. 

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.