EUR/USD and GBP/USD gains ease, while USD/JPY breaks support
Dollar weakness has seen EUR/USD and GBP/USD rise, while USD/JPY weakens. Can these moves persist or will the Fed help bolster the greenback?
EUR/USD comes under pressure from Fibonacci resistance
EUR/USD managed to surge into the 61.8% Fibonacci resistance level yesterday, in a move that broke out of the hourly trend and instead seems to have kicked off another wider retracement as evident on the four-hour chart. That wider trend of lower highs remains in play unless we see a break through the $1.0991 peak from mid-April.
Given the respect of the 61.8% Fibonacci retracement ($1.089), there is a chance we could simply head lower from here, with a break below $1.0809 adding credence to that idea. However, there is also a possibility we could rise into the 76.4% retracement at $1.0923. In either case, a bearish outlook is in play unless we see a break through $1.0991.
GBP/USD continues its ascent, but resistance lies ahead
GBP/USD has been on the rise since finding Fibonacci support at $1.228 last week. With that pair moving into a deep retracement zone, there is a possibility we could see some downside if the price starts to break from this current intraday rise.
As such, a break below $1.2404 could start to see the pair reverse lower once again. Until then, it’s a case of seeing whether this rally has enough juice left to break through the 76.4% level or not. Should that occur, we could be looking at a continuation break through $1.2647.
USD/JPY breaks into fresh one month lows
USD/JPY managed to break below the crucial ¥106.92 support level yesterday, bringing a new one-month low. That is likely to bring further downside before long.
With the directional bias now clearly established, bearish positions are preferred. A short-term rise is possible given recent declines, yet a bearish outlook remains in play irrespective of whether that happens or not. A break through the ¥108.08 level would be required to negate this bearish outlook.
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.
Please see important Research Disclaimer.
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
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.