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

Sterling remains under pressure ahead of the Autumn Statement, while USD/JPY has entered a consolidation phase.

Sterling and dollar notes
Source: Bloomberg

GBP/USD may challenge Friday’s lows

Today’s Autumn Statement offers the potential for volatility, even if the actual substance is likely to be thin on the ground. We have seen early weakness in GBP/USD, with the possibility that the price moves back to the Friday low of $1.2320.

A move below here still targets $1.21. The price must clear the 50-day simple moving average (SMA) - currently $1.2535 - to begin a fresh upward move. 

EUR/GBP may be dictated by sterling weakness

With the euro still struggling, it looks like the direction EUR/GBP will be provided by sterling weakness.

It seems a bottom has been established at £0.8500, so a continued push should head towards the Monday peak at £0.8639, and then on to £0.87.

A drop below £0.85 would head to £0.8256. 

USD/JPY in a phase of consolidation

It still looks like USD/JPY has entered a consolidation period. With the price still heavily overbought and no sign of a move through ¥111.50 in sight the next big move could be lower.

We would look for a retracement to ¥110 and then ¥109, while a break higher would head towards the ¥114 area.

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.