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 and GBP/USD

EUR/USD and GBP/USD both see sharp selling to end the week, yet with EUR/USD at a critical support level, a break below here would point towards significant downside to come for both.

Source: Bloomberg

EUR/USD falls into critical breakout support level

EUR/USD seemingly left behind the triangle formation of old, instead focusing on the two key breakout points of $1.1745 and $1.1575. It is the latter which is now coming into question, with a break below this level pointing towards a potential bearish extension from here.

With that in mind, watch for how EUR/USD reacts at this level as a determinant of future price action. An hourly close below $1.1575 would point towards a bearish breakdown from here. Otherwise, watch for a potential rebound to continue the wider consolidation that has been in place over the past month.

GBP/USD breaking lower from retracement

GBP/USD been selling off relatively consistently since the rally into the 76.4% retracement last week. This points towards a continuation of the wider downtrend, with a fall below $1.2958 likely before long.

The intraday head and shoulders pattern completed this week also adds greater credence to the bearish picture. As such, further downside looks likely from here, with a rally through $1.3173 required to negate this bearish view.

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