FX levels to watch: EUR/USD, GBP/USD and USD/CAD
The dollar has been under pressure, with EUR/USD and GBP/USD on the rebound. However, with a sharp decline at the turn of the year, is this a precursor to a bullish surge in the dollar?
EUR/USD pushing higher after recent decline
EUR/USD has been falling back over the turn of the year, with the price dropping below the key $1.1305 level. To some extent, that fall into a new lower low could signal the start of a more bearish phase coming into play.
However, with the price having dropped back towards the ascending trendline, it is clear that the wider upward trend could remain in play. As such, there is not a clear-cut bullish or bearish pattern in play here, with arguments for both. As such, watch for a break through $1.1500 to confirm the bullish theme. Otherwise, a bearish turn before that $1.1500 level would start providing signals of a possible next leg lower.
GBP/USD rally looks likely to fall short
GBP/USD has been gaining ground since the drop below $1.2477, with the pair now starting to stall.
That drop into a new low on 2 December highlights a continuation of the wider bearish theme, with the current rally looking likely to falter rather than create a new higher high. As such, watch for a potential bearish shift from here, with a rally above $1.2812 required to negate the wider downtrend.
USD/CAD drops into trendline support
USD/CAD has been on the decline throughout the start of the new year, with the price falling into and below the lower boundary of the ascending channel pattern.
This raises the chances of a wider downturn for the pair, yet with the price currently challenging an ascending trendline, there is a good chance we will see a rebound soon. Thus, it makes sense to watch for a potential rebound from here, with a drop below trendline support providing a bearish continuation signal for the short term.
IGA, may distribute information/research produced by its respective foreign affiliates 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 IGA 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.
Please see important Research Disclaimer.
See an opportunity to trade?
Go long or short on more than 16,000 markets with IG.
Trade CFDs on our award-winning platform, with low spreads on indices, shares, commodities and more.
Live prices on most popular markets
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.