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

A mixed bag for the dollar sees a gradual ascent for both USD/JPY and EUR/USD. Meanwhile, EUR/GBP has hit a major resistance level after recent gains.

EUR/USD expected to turn higher once again

EUR/USD looks likely to follow its 76.4% retracement with another push higher, as the pair moves towards the back end of a triangle formation.

The weakness we have seen in early trade looks like the pair is creating a higher low before we push higher once more. Given the uptrend in place over recent months, the ultimate breakout from this pattern is expected to be bullish, with a fall below $1.2385 required to negate this view. 

EUR/GBP turning lower from key resistance

EUR/GBP managed to rally up to the crucial £0.8833 resistance level this morning, following a wider 76.4% retracement last week.

This points towards the pair breaking higher from here, with a move through £0.8833 resistance expected soon enough. However, until we break that level, there is a chance we could start to retrace lower from here. As such, while a bullish outlook remains in play, be aware of a potential retracement over the short term.

USD/JPY caught between trendlines

USD/JPY has been retracing lower this morning, following a strong move into trendline resistance on Friday. However, with the price having moved into trendline support, we are seeing the pair trade towards the apex of a symmetrical triangle formation.

Should we break through resistance, there is a strong chance we would simply see a deeper retracement into the 76.4% before turning lower once more. As such, we would need to break above ¥111.48 to negate the wider bearish trend, where this current upside is seen as a short-term pullback, within a bearish USD/JPY story.

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 IG 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 writer

Find out more about