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.

EUR/USD, GBP/USD and USD/JPY all in retreat

Risk aversion is being felt across FX markets, as the dollar rises versus the euro and sterling, but gives way against the yen.

EUR/USD reversal continues

The downtrend of the past week goes on, as the EUR/USD price heads back to the lows of last week at $1.082. Further losses bring $1.077 into view, the lows from early April.

As we saw on Friday and again yesterday, the price is so far unable to break above $1.089, a key area of resistance over the past week. Until this is broken to the upside, further gains seem unlikely.

GBP/USD downtrend gathers pace

It is a similar outlook for GBP/USD, as the downtrend from last week’s peak at $1.265 continues. Lower highs and lower lows remain in place.

Some strength in Monday’s session ran out of steam at $1.248, hitting trendline resistance. While the price is attempting to push higher in the early part of Tuesday’s session, it will need to clear $1.248 to provide a more bullish view. Further declines head towards $1.231 and $1.22.

USD/JPY struggles to hold its ground

Since Friday we have seen sellers continue to bear down on the price of USD/JPY, with short-term bounces coming under pressure.

Repeated attempts yesterday to break short-term resistance failed yesterday, and further declines towards ¥107.00 and lower seem likely. A rally through ¥107.90 would provide a more bullish short-term view.

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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