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

The dollar is surging amid a flight to safety given the economic demise of Turkey. 

EUR/USD breakdown extends, as traders flock to USD

EUR/USD has extended lower following the clear bearish break that came with a move below $1.1574 last week.

That fall out of a consolidation phase led to a move in the direction of the wider bearish trend. Further downside looks likely, with any rebound likely to provide a selling opportunity. We would need a break above $1.1628 to provide a signal that this sell-off could be over.

GBP/USD continues to decline within downtrend

GBP/USD has continued its downtrend, with the creation of lower highs and lower lows providing a clear clue that the short-term trend is expected to persist.

That means a break above $1.2909 would be required to point towards a stronger rebound. However, that would be perceived as a signal of a retracement of the near-term decline from $1.3214, rather than a wider reversal signal.

USD/CAD rallies higher from wedge formation

USD/CAD has managed to extend its wedge breakout, with the initial break providing us with a nice 76.4% retracement before extending higher.

We have not seen the price move into the 61.8% retracement of the $1.3290-$1.2962 decline. Watch for how we respond to this level as a gauge of whether we are going to take a breather here or not. Should the price respect those levels, it would also give us a better idea of whether this a retracement or in fact a reversal of the wider move (bullish).

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