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

Dollar strength was the standout feature of last week, but is it ebbing as March progresses?

EUR/USD rally starts to ebb

The pair has recovered somewhat from the beating it received after last week’s European Central Bank (ECB) meeting, but EUR/USD remains well below last week’s highs.

Having bounced overnight from below $1.23, upward momentum appears to be fading, raising the prospect of a fresh move lower. The 50-day simple moving average (SMA) at $1.2280 is the first area of possible support, and then below the $1.2165. A longer-term rally needs to clear $1.2450.

GBP/USD maintains downward bias

Cable has trended lower since the end of January, and last week saw another bout of selling develop for GBP/USD around $1.39.

If momentum falters around this level again, we look to the $1.37 as the next major area of possible support. It would require a daily close above $1.39 to break the procession of lower highs.

USD/JPY turns lower again

The dollar enjoyed a good week, rallying from the lows near ¥105, but there is a risk for USD/JPY that the 2018 downward trend is reasserting itself.

The pair has faltered around ¥107, and if a new lower high is created here, a move back to ¥105 and lower could be in the offing. A close above ¥107 would then signal that a possible challenge of the ¥108 high could be on its way.

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.