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Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money.

​GBP/USD, retreats from $1.27, while dollar recovers against the yen and the Canadian dollar

A recent run of weakness for the US dollar has paused for now, with the greenback making some headway against sterling, the yen and the Canadian dollar.

GBP/USD Source: Bloomberg

​​​GBP/USD bounce stalls at $1.27

GBP/USD reached a high of $1.27 last week, but has since dropped back.

​​This is perhaps the most sustained weakness since the rally began in late October. For the moment, we look for a pullback towards the 200-day simple moving average (SMA) that might create a higher low. A close back below $1.24 would begin to call the bullish view into question.

​​A rally back above $1.27 puts the buyers back in charge and could see $1.28 and higher tested.

GBP/USD chart Source: ProRealTime
GBP/USD chart Source: ProRealTime

​USD/JPY pullback pauses

​The current pullback with USD/JPY has seen the price drop to the 100-day SMA, and Monday saw the price open below this level for the first time since April.

​​A rally back above ¥148.00 might suggest that a higher low is in place and that a move back towards ¥152.00 might be underway. This would revive the uptrend of the past six months.

​​A close back below ¥146.00 hands the initiative to the sellers and might then see ¥144.93 tested. Below this lies the 200-day SMA.

USD/JPY chart Source: ProRealTime
USD/JPY chart Source: ProRealTime

​USD/CAD rallies from 200-day moving average

​The US dollar has revived against its Canadian counterpart, after a pullback from the November highs.

​​The bounce back with USD/CAD above the 200- and 100-day SMAs now clears the way for a test of the 50-day SMA from below, and would also create a higher low.

​​A reversal and close below C$1.348 would then open the way for a test of the September lows around C$1.34.

USD/CAD chart Source: ProRealTime
USD/CAD chart Source: ProRealTime

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.

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