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. 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.

EUR/USD, EUR/GBP and GBP/USD look top heavy

EUR/USD, EUR/GBP and GBP/USD continue to display a short-term bearish bias.

​EUR/USD capped by January high, revisits breached resistance line, now support

EUR/USD continues to be capped by the January peak at $1.1482 and did a ‘return to point of breakout’ by dipping back to the breached 2021-to-2022 downtrend line at $1.1402.

Slightly further down the late November and December highs at $1.1386 to $1.1382 may act as support as well as the mid-point of Thursday’s long ‘body’ of its candle at $1.1368. The ‘body’ shows the distance between the open and the close of a candle.

The January and current February highs at $1.1382 to $1.1383 will need to be exceeded for EUR/USD to continue its ascent and for the next higher October and 5 November lows at $1.1513 to $1.1529 to be reached.

EUR/GBP is to come further off its £0.8478 current February high

EUR/GBP looks short-term toppish and is likely to glide back towards the 55-day simple moving average (SMA), January high and 23 December low at £0.8424 to £0.8416. This support zone may well underpin.

Resistance above Monday’s high at £0.8478 can be found along the 2020-to-2022 downtrend line at £0.8492 and the 200-day SMA at £0.8514.

GBP/USD weighs on the $1.3513 to $1.349 support zone

GBP/USD's advance from its late January low at $1.3365 has so far taken it to last week’s high at $1.3628 before tumbling back to the mid-November high, 38.2% Fibonacci retracement and 6 January low at $1.3513 to $1.349.

A drop through $1.349 may lead to the next lower $1.3441 to $1.3431 support area to be touched. It encompasses the early as well as the 25 and 26 January lows and the 55-day SMA. Further down lies the January trough at $1.3359.

Resistance above the 50% retracement of the January slide at $1.3552 and the 18 January low at $1.3573 can be found along the 61.8% Fibonacci retracement and one-month resistance line at $1.3599 to $1.3602.

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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