Skip to content

CFDs are leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your deposits, so please ensure that you fully understand the risks involved. CFDs are leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your deposits, so please ensure that you fully understand the risks involved.

Dollar strength in play for EUR/USD, GBP/USD and USD/JPY

EUR/USD, GBP/USD and USD/JPY driven by dollar strength as US yields continue to rise.

Video poster image
Transcript

EUR/USD fading as ECB dent rise in European 10-year yields

EUR/USD is on the back foot this morning, with yesterday’s European Central Bank (ECB) actions driving a divergence between US and eurozone treasury yields. That widening gap will likely drive EUR/USD lower if it persists, with the currency pair looking to end a recent rebound.

Despite failing to reach a deeper Fibonacci level, we are now seeing a more bearish stance come back into play. A break below trendline support has now taken us towards the $1.1928 support level. A break below that point would signal a potential bearish reversal coming into play which furthers the wider downtrend in play despite recent gains. As such, the ability to break below the $1.1928 should tell us a lot about the near-term outlook for this pair.

EUR/USD chart Source: ProRealTime
EUR/USD chart Source: ProRealTime

GBP/USD pulls back from key resistance

GBP/USD has managed to recover a significant amount over the course of the week, with the pair moving into the key $1.40 handle.

While the price has initially turned lower from that resistance point, the pullback has taken us into trendline support. With that in mind, there is a good chance we see the bulls come back into play before long. Alternatively, a break below the $1.3845 level would be required to bring a fresh bearish view for this pair.

GBP/USD chart Source: ProRealTime
GBP/USD chart Source: ProRealTime

USD/JPY breaks higher from consolidation phase

USD/JPY has finally broken from its recent consolidation phase, with the pair looking likely to continue its impressive uptrend from here.

That uptrend should bring a strong move higher from here, with a decline through the recent swing low of ¥108.35 required to negate that bullish outlook.

USD/JPY chart Source: ProRealTime
USD/JPY chart Source: ProRealTime

IGA, may distribute information/research produced by its respective foreign affiliates 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.

The information/research herein is prepared by IG Asia Pte Ltd (IGA) and its foreign affiliated companies (collectively known as the IG Group) and is intended for general circulation only. 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, and 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. Please see important Research Disclaimer.

Please also note that 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.

Start trading forex today

Trade the largest and most volatile financial market in the world.

  • Spreads start at just 0.6 points on EUR/USD
  • Analyse market movements with our essential selection of charts
  • Speculate from a range of platforms, including on mobile

Live prices on most popular markets

  • Forex
  • Shares
  • Indices

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 20 mins.

The Momentum Report

Get the week’s momentum report sent directly to your inbox every Tuesday for FREE. The Week Ahead gives you a full calendar of upcoming key events to monitor in the coming week, as well as commentary and insight from our expert analysts on the major indices to watch.

For more info on how we might use your data, see our privacy notice and access policy and privacy webpage.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.