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

The US dollar continues to gain the upper hand in the FX sphere, ahead of the Fed meeting this week.

Euro and dollar notes
Source: Bloomberg

EUR/USD - a bearish development on the way?

It doesn’t seem like there is an abundance of positive momentum in EUR/USD at present. The pair has been treading water for around a month now, with the upward momentum of April and May fizzling out.

As noted yesterday, a move below $1.1109 is the really bearish development, so we will watch today if a bounce can materialise to keep the price off the lows of last week around $1.1172. 

GBP/USD awaiting UK data this week

The drop through $1.2706 is the bearish development that we had been expecting. While UK data this week could rescue GBP/USD, the next area of support to watch would be the $1.2616 area.

A drop below here would raise the prospect of a move down towards $1.24 in the longer term. Bulls need a move back above $1.2775 to indicate that they have managed to wrest back control.

USD/JPY awaiting Fed meeting

There has been a notable recovery in USD/JPY over the past few days, with the possibility that a further rally will recover ¥110.56, the 200-day simple moving average (SMA). Above this, the late May high at ¥111.78 comes into play.

Much will likely depend on the Federal Reserve (Fed) meeting, but those looking for an extension of the 2017 downtrend in USD/JPY will want to see ¥109.50 lost as a prelude to a move back to ¥108.

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