Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. Before deciding to trade foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. You could sustain a loss of some or all of your initial investment and should not invest money that you cannot afford to lose. CFDs are complex instruments. You can lose your money rapidly due to leverage. Please ensure you understand how this product works and whether you can afford to take the high risk of losing money.

Dollar expected to weaken in EUR/USD, GBP/USD and USD/JPY

Dollar expected to come under pressure once more, with EUR/USD, and GBP/USD strength likely to be joined by USD/JPY weakness.

​EUR/USD starts to turn higher after overnight declines

EUR/USD has kicked off the week on a somewhat negative tone, with the pair moving lower to give back some of the gains from last week. With the price failing to break beyond the $1.0921 support level thus far, there is a good chance we could resume the recent bullish trend once more from here.

Watch for a break through the 20-mark on the stochastic to provide a signal that momentum is truly gaining on the bullish side of this trade. A break below the $1.0921 level would negate this bullish outlook and signal a wider pullback coming into play.

GBP/USD pullback could bring bullish reversal

GBP/USD declines seen throughout the final day of the week appears to have set us up for another move lower today, with the price gapping lower and declining into the 200-hour simple moving average (SMA). However, the recent uptrend remains intact given the failure to break below $1.2389 thus far.

With that in mind, there is a good chance we will start to see the bulls come back into play from here, with a break through 20 on the stochastic providing a bullish signal. Conversely, a break below $1.2369 would negate this bullish outlook.

USD/JPY regaining ground, yet wider bearish trend remains

USD/JPY is starting to regain ground following a period of declines for the pair. With the wider outlook clearly bearish, there is a good chance that the current consolidation is a precursor to further downside.

Nevertheless, if we see the price break through the ¥106.93 level, we could be looking at the heightened likeliness of a wider rise coming into play. Until then, there is a good chance of a move lower, with a break below the ¥106.60 level providing greater confidence of that bearish move coming into play.

This information has been prepared by IG, a trading name of IG US LLC. This material does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. You should not treat any opinion expressed in this material as a specific inducement to make any investment or follow any strategy, but only as an expression of opinion. This material does not consider your investment objectives, financial situation or needs and is not intended as recommendations appropriate for you. No representation or warranty is given as to the accuracy or completeness of the above information. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. Any research provided should be considered as promotional and was prepared in accordance with CFTC 1.71 and designed to promote the independence of investment research. See our Summary Conflicts Policy, available on our website.

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