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 and GBP/USD weakening, while USD/JPY rallies

USD/JPY is still looking to push higher, but EUR/USD and GBP/USD are under threat as recent weakness intensifies.

EUR/USD back to August lows

EUR/USD has almost completely retraced the early August bounce, with shorts coming in to push the pair back down over the past week.

A bounce from above $1.105 would create a possible double-bottom, and target the $1.122 highs from last week. Further declines below $1.10 would be a significant bearish development and open the way to the May 2017 lows at $1.085.

GBP/USD bounce under threat

After a brief bounce above $1.21, the GBP/USD pair looks to be headed lower once more.

The price ran out of steam around $1.217, the highs from early August, and fresh declines seem likely, with the August low of $1.2025 the first target. A push below $1.2084 would imperil the sequence of higher lows seen since last week, and suggest that the sellers are back in charge.

USD/JPY still rallying

In contrast to the previous two pairs, USD/JPY may soon provide a buying opportunity.

Having pushed higher over the past week, the price has dropped back from resistance around ¥106.70. A possible higher low is being created, with a bullish crossover in hourly stochastics potentially providing a short-term buying opportunity. The longer-term picture remains bearish, with the pair having carved out lower highs since April.

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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