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

The dollar takes a hit, with EUR/USD and GBP/USD rallying sharply. Meanwhile, USD/CAD is worth watching for a potential rebound in the coming weeks.

Source: Bloomberg

EUR/USD bounces through Fibonacci level

EUR/USD has managed to gain a significant amount of ground this week, with the pair rallying through a number of short-term resistance levels. We have seen the pair pass through the 76.4% retracement, only to seemingly find it as new support overnight.

A break through $1.0655 would have significant wider considerations, bringing the potential for a longer lasting push higher for the pair. Considering that this rally is coming from an attempted breakout below $1.0462 on the longer term charts, the bearish short-term view is somewhat negated. Despite this 76.4% retracement looking like a potential short, there is a clear story building on a potential longer term recovery for the pair. As such, it is worth waiting to see if we can break above $1.0655 to dictate the state of play.

GBP/USD breaks key resistance level

GBP/USD managed to push through the crucial $1.2388 mark yesterday, in what was an incredible run for the pair. This brings about a more bullish scenario, with the current pullback looking like a short-term phenomenon before we move higher once more.

The long-term outlook is still bearish, yet on the medium term, it looks like we could see a break back into the $1.2500 region. As such, watch out for potential Fibonacci support around $1.2309, $1.2333 and $1.2352.

USD/CAD looking for medium term recovery

USD/CAD has sold off sharply over the past fortnight, with price falling back towards the bottom of its eight-month channel. This isn’t to say that the sell-off is over, as the short-term has not shown this, yet it is likely that we will see the pair start to form those bottoming patterns soon.

Yesterday saw the market fall into the 76.4% level, which provided a strong bullish buying opportunity. Should price fall back into the 70% (C$1.3236) or 76.4% (C$1.3203) region once more, then this would provide an opportunity to get into this long-term trend at an advantageous price. 

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