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

Cable continues to retreat, while USD/JPY pauses for breath after a surge yesterday.

Euro notes
Source: Bloomberg

GBP/USD eyes $1.26

The drop back yesterday may mark the beginning of a steady pullback from the 50-day simple moving average (SMA). Ideally we would need to see the price move below the $1.2450 area to create a new low, with a test of support possible at $1.2350.

A recovery would need to get back above $1.26, which might clear the way to a test of $1.2680.

EUR/USD could drop to lows of 2015

After yesterday’s savage sell-off, the pair is bouncing having hit $1.0714. However, buyers will need to get the price back above $1.0850 - the lows of late October - to really indicate that bullish momentum is back.

Otherwise, it may be that this is another chance to sell into strength, with an initial target of $1.07, and then down to $1.0525 and the lows of 2015.

USD/JPY could target ¥112

Yesterday’s big move higher took the pair above the crucial ¥107.50 area. With the price still overbought some bullish momentum may fade, but it would need a close back below ¥107.50 to indicate a pullback is in the offing.

If buyers can keep the price moving higher then the next area to watch is ¥112. 

USD/CAD eyes support around C$1.3264

Having dropped back today, the pair is giving latecomers a chance to hop on board the rising trend that has prevailed since September.

Further declines might see the price move back towards support around C$1.3264. 

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.