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 and GBP/USD head lower as USD/JPY consolidates below resistance

EUR/USD and GBP/USD continue to show signs of impending weakness, while USD/JPY consolidates below key resistance.

EUR/USD remains at risk despite Monday’s gains

EUR/USD has been trying to regain lost ground over the course of this week, coming off the back of Friday’s sharp decline for the pair.

However, with a wider bearish trend in play, that break below $1.1572 does highlight the potential for another turn lower before long. With that in mind, a bearish outlook holds unless the price rises up through $1.1692 resistance.

GBP/USD continues to head lower

GBP/USD is on the back foot ahead of tomorrow’s Bank of England (BoE) meeting. While we are expecting to see the bank raise rates, there are questions over whether the meeting will provide a more dovish stance in regard to future rate movements.

The downward trend of lower highs seen over the course of the past three-months does highlight the potential for a bearish continuation move like the one currently taking place. As such, further downside does look likely, with the continued creation of lower intraday highs key to that. A rise up through $1.3693 would be required to bring about a wider upside move for the pair.

USD/JPY continues to consolidate below key resistance

USD/JPY has been consolidating below the long-term resistance level of ¥114.73 of late. The near-term trend does still remain bullish, but that does raise the risk of a near-term pullback.

However, a decline through ¥113.00 would be required to provide that bearish signal. Instead, we have seen another 76.4% Fibonacci support level come into play here, with the price on the rise since. As such, there is a good chance we remain within this consolidation pattern, with a break through either ¥113.00 (bearish) or ¥114.73 (bullish) bringing a fresh signal for traders.

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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