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

It looks like a busy day for sterling, as the Bank of England releases its latest inflation report, while USD/JPY looks set to test key support.

Euro and dollar notes
Source: Bloomberg

GBP/USD uptrend appears to be intact

The pair is now close to the December peak at $1.2760. A break above here leaves the price free to test $1.2980 and then $1.3090.

The Bank of England meeting and inflation report will provide volatility, but the uptrend remains intact unless we see a move below $1.2550. 

EUR/USD rally set to continue, despite dip

There is no sign of the EUR/USD rally stopping, with a dip yesterday below $1.0750 bringing out the buyers. The next areas on the upside to watch are $1.0826 and $1.0880, with the 200-day simple moving average (SMA) at $1.10 beyond this.

We will need to see a daily close below the weekly pivot at $1.0710 to suggest a turning point has been reached. 

USD/JPY bears target ¥112.50

Since mid-January, the ¥112.50 area has provided firm support. So while bears may have been able to knock the pair back from ¥114 yesterday, keeping the downtrend intact, they now need to push the price below ¥112.50 to open the way to ¥110.

On the upside, potential resistance lies at ¥114 and then ¥115.50 for USD/JPY.

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.