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

A mixed picture puts a bullish EUR/USD and bearish USD/JPY against a potential pullback for GBP/USD.

Euro and pound
Source: Bloomberg

EUR/USD likely to turn higher despite early weakness

EUR/USD has been weakening into the open today. However, given the break through the $1.1456 level on Friday, it seems likely we will soon head back through last week’s high of $1.1489 soon enough.

With that in mind, the current pullback is perceived as a retracement before we move higher once more. Only a break back below $1.1370 would negate this view. Watch out for trendline support as a potential area for bulls to come in. Otherwise the Fibonacci retracements come into play below there.

GBP/USD drifting lower after sharp rally

GBP/USD broke sharply higher on Friday following a retracement earlier this month. The daily chart below highlights the trendline resistance up ahead, which brings about an increased chance of weakness from here.

As such, watch out for a potential pullback from here as we remain within a rising wedge pattern.

USD/JPY hits trendline support

USD/JPY sold off sharply last week, with the price hitting a long term inside trendline on Friday. This is certainly a near-term challenge, which if surpassed would point towards a move into the ¥1.1099 region.

For guidance on the next move, watch out for a break below trendline support or above ¥113.57 (bullish). Bear in mind that although we could be looking at a possible move lower through trendline support, the medium to long-term view remains bullish thus longs would be considered if we moved into the ¥110.50-¥110.16 region.

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.

Find articles by analysts

Find out more about