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

More dollar strength has been seen in currency markets, as EUR/USD touches a fresh low for the year.

EUR/USD bounce falters

EUR/USD has plumbed to a new low, continuing its extended downtrend and heading towards possible support at $1.111.

A rally will target $1.13, previous key support, while above this the November high at $1.15 comes into play. Having rallied from oversold intraday conditions, it will be important to watch the $1.126 area. A failure to break above this would suggest a lower high and bring more selling pressure into the picture.

GBP/USD still under pressure

GBP/USD created a new lower high last week, and further declines will target $1.2773.

A bounce from intraday oversold conditions needs to clear $1.295 to suggest more near-term upside. A failure to push above here would bring out more selling pressure, and below $1.2827, Monday’s low. The price heads towards the October low at $1.2696.

USD/JPY keeps on rallying

The ascent of USD/JPY continues, consolidating above ¥114.00 and on course to target the ¥114.50 area seen at the beginning of October.

Dips have been firmly bought over the past few days, so we would need to see a move below ¥113.00 to suggest some near-term weakness.

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.

Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76% 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.