All trading involves risk. Losses can exceed deposits.
Over 40 years’ heritage
Over 185,000 clients worldwide
Over 15,000 markets

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

EUR/USD is finally seeing some weakness, while USD/JPY is looking to bounce after a huge drop yesterday.

All trading involves risk. Losses can exceed deposits.
EUR/USD notes
Source: Bloomberg

EUR/USD a pause is in the off for now

Bulls finally got a retracement in EUR/USD yesterday, with the small dip followed by more buying that took the pair to its highest level since 10 October.

Now some losses are being seen once again, but as long as the intraday price action does not breach the $1.1080 level that held yesterday the uptrend is intact. A bounce will need to break the overnight high at $1.1172 to maintain forward momentum, but it looks like a pause is in the offing for now. 

EUR/USD chart

GBP/USD RSI continues to fall

GBP/USD has pushed back to the top end of its recent range, around $1.2970, but with no sign of further momentum, plus signs of deterioration on the daily chart as the relative strength index (RSI) continues to fall, it may be that a drop back towards $1.2850 and the bottom end of the range is in the offing.

Below $1.2850 the price could find support at $1.2775, which would also put it close to the rising trendline that has been in place since early March.

GBP/USD chart

USD/JPY pause or more of retracement likely

The demise of the USD/JPY rally from the April low, and with it the carry trade, is being viewed as one of the key suspects in the current market sell-off.

Signs of a bounce have been rudely interrupted by a swift drop back below ¥111, but given the magnitude of yesterday’s fall, a pause or more of retracement is likely. This could run as far as ¥112 or ¥112.50 towards the 50-hour simple moving average (SMA), before turning lower once again. A breach of ¥110.11 would target ¥108 and the April low. 

USD/JPY chart

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. 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. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

Find articles by analysts

Education

  • Pricing and weighting

    Find out the purpose of major and minor stock indices and how they are compiled. Learn how to gain exposure to these volatile markets through some of the most popular trading products in the world.

  • Stops

    Learn the different ways you can open and close a position – from a simple, immediate trade to an automatic instruction to deal in your absence. Orders can help you lock in profits or guard against loss: get to know the various types and see how to use them.

  • Dividends

    Without shares there could be no stock markets, which are vital to every national economy. Find out how the shares trade enables companies to expand and develop, while providing sources of income to private investors and larger funds.