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

Losses continue for EUR/USD, while there seems to be no stopping for USD/JPY. 

USD/JPY notes
Source: Bloomberg

EUR/USD more downside is possible

EUR/USD has suffered two days of heavy losses, and has begun nosing its way through support levels at $1.0950 and $1.09.

Already an overnight rally appears to be losing steam at $1.09, providing further indications that more downside is possible. Key short-term support lies in the area $1.0829-$1.0851, and if this is broken then we may well see a swift move to the rising trendline from the December lows. A recovery above $1.09 would suggest a move back to resistance at $1.10.

GBP/USD awaiting BoE meeting

GBP/USD has been moving tentatively higher, recovering from a dip to $1.2850 last week, but is showing a degree of hesitation around $1.30, with tomorrow’s Bank of England (BoE) meeting and inflation report undoubtedly contributing to the air of caution.

Key support remains at $1.2850 in the event of any turn lower, while below this, the rising March trendline comes into play around $1.27.

USD/JPY pushing higher again

The surge from ¥108 has continued, with USD/JPY pushing on through the descending trendline from the January high. On the daily chart there is now little in the way of resistance before ¥115.50, the high from March and key resistance throughout the first quarter of the year.

Above this, we have a downtrend line that runs back to August 2015, and would suggest momentum would carry the pair all the way to ¥116.50. It would need a move back below ¥113 to suggest that a turn lower is at hand. 

IGA, may distribute information/research produced by its respective foreign marketing partners within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

This information/research prepared by IGA or IGA Group is intended for general circulation. It does not take into account the specific investment objectives, financial situation or particular needs of any particular person. You should take into account your specific investment objectives, financial situation or particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit. 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. In addition to the disclaimer above, the information does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any views and opinions expressed may be changed without an update.

See important Research Disclaimer.