Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 70% 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.

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

EUR/USD and GBP/USD are both showing signs of continued decline, while the USD/CAD sell-off is reaching a point where a rebound is looking increasingly likely. 

EUR/USD looking bearish after recent breakdown

EUR/USD fell below the critical $1.1574 support level last week, breaking out of a three-week range for the pair.

This points towards a likely continuation of the bearish trend that took hold throughout April and May. With that in mind, further downside looks likely, although a break through $1.1610 resistance would point towards a short-term rebound to retrace the sell-off from $1.1744.

GBP/USD sell-off gathers pace

GBP/USD has continued to pull back, with the pair looking set to continue the wider downtrend.

A break below $1.2958 looks likely, upon which we would have proof that the downtrend continues given the creation of another lower low. Any rebound would have to break through $1.3173 to negate this bearish view.

USD/CAD wedge points to a short-term downside

USD/CAD has been gradually declining lately, with the price trading within a falling wedge formation. With the price currently trading at the top end of this pattern, another move lower looks likely from here.

However, given that a wedge formation will typically provide a reversal breakout, there is a good chance that the ultimate resolution of this sell-off is a rebound. With that in mind, watch for an hourly close above $1.3039 as a signal of a potential bullish shift in sentiment. Until then, a short-term downside looks likely. 

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 writer