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

FX markets look relatively quiet compared to soaring equity markets, but the Aussie has held up well, but USD/JPY is flashing a warning signal.

Pound sterling and dollar note
Source: Bloomberg

Mark Carney’s hints at fresh easing put new downward pressure on sterling, although IN_GBPUSD has yet to push below the lows of last week. This could be the fundamental catalyst that pushes the pair further downwards.

A break below $1.3110 would open the way to further downside, with the mid-1980s lows in prospect, down towards $1.15. Any bounce above $1,35 would then need to fill the gap from last week, with some resistance at $1.3675.

If the pair fails to push above the 200-day simple moving average (SMA) today ($1.1098) then, despite the bounce of the past few days, the pair may start to drop once again, down towards $1.10 and then $1.0912. A rally above the SMA would target the peak from Thursday, around $1.1156, and then on towards $1.12

​The pair has marched steadily higher along with other key risk gauges like global stocks markets, although it is still well off the pre-Brexit highs. So far gains have faltered just below $0.7480, and thus this is the area to watch today and in coming sessions.

It would likely take a move below $0.74 to reignite bearish momentum, with downside targets at $0.7350 and then $0.73.

While other markets have raced higher, the sober reaction of IN_USDJPY may well point to troubles beneath the surface. The pair needed to push on above ¥104 to maintain its upward momentum, but at present it looks to be fading.

A close below ¥102 would likely hand the initiative to the bears, with a potential move back down to the lows of last week below ¥100. 

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