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 comes under pressure as GBP/USD and USD/JPY recover

The euro has failed to make much headway against the dollar, but both sterling and yen have advanced over the past two sessions.

EUR/USD stuck below resistance

While EUR/USD has managed to stop the downward move of last week, it has been unable to break through the $1.185 zone of resistance.

However, with a higher low yesterday there is still scope for a break higher, which would in due course target $1.196. A reversal below $1.178 would negate this view and open the way to $1.171.

GBP/USD targets $1.325

Here the GBP/USD has managed to rally throughout the week, putting it on course to target the $1.325 zone that marked the highs last week.

This impressive recovery revives the more bullish view, although a break out above last week’s highs is still needed to cement this view. For now bears seem to be out of luck, unless we see a reversal that wipes out the gains of the week so far and then breaches $1.305 to the downside.

USD/JPY remains in rising channel

The USD/JPY price continues to adhere to a rising channel, having completed a retracement from the highs seen on Tuesday.

A continued rebound raises the prospect of a move back towards ¥106.60, and then to ¥106.80, and the upper bound of the channel. A drop below ¥105.70 would potentially mark the end of this bullish view and open the way to further downside.

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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