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

All eyes are on sterling today as the Bank of England meets for its latest policy decision.

Euros and dollar notes
Source: Bloomberg

GBP/USD fails to break from downtrend

An overnight rally took the pair above $1.3250, but the 100-hour simple moving average ($1.3258) prevented further gains. The pair certainly looks stuck in a downtrend, with the overnight high marking the latest lower high. 

Now we look to see if $1.3150 can be breached to create a new lower low and a path to the $1.3050 area seen at the end of August. Bulls would need to see a push through $1.3280, with the 12/13 Sept peak at $1.3350 the next target to watch for. An attainment of the latter would certainly mark the beginning of a new uptrend.

 

 

EUR/GBP continues its move higher

The uptrend off the lows of 6 September remains intact, with the dip from Tuesday met by furious buying. Support in the early part of today’s session was found around £0.8480. 
A dovish BoE could put more upward momentum into this pair, with a target of £0.8540 in the first instance. A drop through £0.8460 could raise the possibility that the move higher has reversed course.

 

USD/CAD pushes to July high

This pair offers another great trend, if it is rather steep at present. The price showed distinct reluctance to stay below C$1.3150, but with the August and September peaks now exceeded, the target to watch is the July high at C$1.3255. 
With the price overbought intraday we may see some weakness, but it would need a firm move below C$1.3150 to suggest a new downtrend is beginning. 

 

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.