FX levels to watch: GBP/USD, EUR/USD, AUD/USD, USD/JPY

Dollar weakness appears to be abating, which is putting a dent in cable’s remarkable rally. 

EUR/USD forex
Source: Bloomberg

GBP/USD runs into resistance
Cable’s remarkable rally has run right into the previous support line from mid-2015, which is now acting as resistance. The failure to push on beyond $1.46 suggests a topping pattern is in place and that we can now expect more downside here.

Support comes in around $1.4450 and then $1.4377. It would take a move above $1.46 to reignite the rally, which would then push towards the 50-day SMA at $1.47. 

EUR/USD gains on hold
Two strong days of gains in EUR/USD have given way to a pause today. If the price fails to push on through $1.1250 then we may see a continued retracement back towards $1.10 with some support possible around $1.11.

The extent of the rally would indicate a pullback is needed, given how overbought the pair is on intraday charts.

AUD/USD lows offer chance to buy
The rising trend off the January lows still holds here, so any dips towards $0.7116 could still be bought. However, sustained price action below here in the coming week is likely to see a new leg lower develop.

In that case, we look to support around $0.7070 and then $0.70 itself. Below here the move would head towards $0.6911 and then $0.6827.

USD/JPY looks primed to sell
With the price below ¥117, it may be the case that we will see more downside. Any bounce back to the 50-hour simple moving average at ¥117.68 would likely be the signal for more selling, with further downside targets around ¥116.8 and then ¥115.51.

Any rally back above ¥117.80 would target ¥118.90 and then ¥120.

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.