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

Dollar weakness pushes EUR/USD higher and USD/CAD lower, while USD/JPY continues to consolidate at a crucial area of resistance.

Euro and US dollar notes
Source: Bloomberg

EUR/USD rallies, yet downtrend remain

EUR/USD is gaining ground this morning, as part of a wider dollar sell-off. However, as mentioned yesterday, any rally is seen as an opportunity to get short at a better price, as long as price does not break back above $1.1059.

As such, a bearish view remains in play for another break lower unless we push above $1.1059. Key support levels to watch come in $1.0964, $1.0952 and $1.0911.

USD/JPY consolidates ahead of key break

IN_USDJPY is bouncing from trendline support this morning, with price refusing to move away from the crucial ¥104.32 resistance level. We are seeing a symmetrical triangle pattern in play, highlighting the indecision at these levels.

Essentially, we await either a convincing break higher to provide a medium-term bullish outlook. Otherwise, a break back below ¥103.35 would bring a more bearish short-term outlook.

USD/CAD tumbles into key support area

USD/CAD sold-off sharply overnight, following a rally into the 100-period simple moving average (four-hour). This weakness is expected to continue for a move into the C$1.30, which is the approximate double top projection target.

However, with price approaching the key C$1.3047-C$1.3064 support zone, it seems likely we will see some form of bounce beforehand. As such, a bearish view remains in play, with any rally seen as a temporary retracement before we move lower once more.

This bearish outlook remains unless we see price break back above C$1.3183.

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.