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

The dollar looks like it could come under some pressure following recent gains. However, with questions remaining, such moves could be temporary in nature.

EUR/USD attempting to establish direction around key resistance

EUR/USD sold off sharply from the $1.1720 region on Friday, with the pair shifting away from a crucial area of resistance. The ability to break through the $1.1746-$1.1790 resistance zone is key in determining whether we are set for a bullish breakout or not.

With the price having turned back towards the $1.1609 swing low, watch for a break below that level as a means to ease back on the recent bullish charge. Alternatively, a failure to break below means that there is a strong likeliness of another push higher to continue the recent recovery.

GBP/USD continues to push upwards

GBP/USD has also retraced, with the pair moving back into trendline support. The recent uptrend points towards another potential shift higher from here, with a break below $1.2979 required to negate this recent rally.

The price is trading within a bearish rising wedge formation, yet it’s worthwhile noting that a breakdown from here is likely to provide a retracement of the rally from $1.2785. However, for now, there is a good chance we will see the market begin to turn higher, in a week that has a host of crucial UK-centric economic releases.

USD/JPY looks set for pullback

USD/JPY is turning lower at the start of the week, with the pair hoping to move into a retracement phase following recent gains. The key level to watch here is ¥111.75, where a break below this level would point towards a move lower. Should we see such a move, a conservative area of support to look for is around the 61.8% to 76.4% retracement zone of the ¥111.11-¥112.17 rally.

However, whether we start a phase of selling depends on the ¥111.75 level, and thus it makes sense to look out for whether we break and hold below that level to determine direction for the short term.

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