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Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 71% 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.
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 71% 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.

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

The euro remains stuck in a downtrend, while the pound is looking to push higher against the dollar.

USD/JPY
Source: Bloomberg

EUR/USD could face further weakness

Having gapped lower and then rallied, the price remains in a downward channel for EUR/USD. An early spike this morning has been sold into, suggesting further weakness ahead.

A test of the bottom end of the channel might suggest a move back down to $1.17. A rally would encounter resistance at the top end of the channel near $1.1780.

GBP/USD in a steady uptrend

GBP/USD continues to be hampered by the $1.3268 level, which constrained further upside yesterday and is doing the same today.

However, the price is within a steady uptrend from the lows of last Wednesday, so until we see the $1.3220 area broken, the sequence of higher lows remains in place. A push above $1.3220 would target the $1.33 area, and then $1.3341.

USD/JPY downtrend yet to be broken

A recovery for USD/JPY yesterday has not been able to break the downward trend seen in November so far. Indeed, the rally to ¥112.64 merely created a new lower high and, with stochastics so heavily overbought, the bears took the opportunity and ran with it.

Further declines would target yesterday’s low at ¥111.95, and then on down to the crucial ¥111.68 area. If the buyers can rescue the situation, then we look for a push above ¥112.70, and then on to ¥113.20.

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