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.

Euro, sterling and yen weaken against the dollar on debt ceiling talk hopes

Hopes of progress in US debt ceiling talks have given a boost to the greenback and put EUR/USD and GBP/USD on the back foot while listing USD/JPY.

EUR/USD sellers in control

Losses continue here with EUR/USD, with the price action yesterday marking a drop below the lows of last week and opening the way to additional downside. Brief intraday rallies such as we saw on Friday and Monday are continuing to be selling opportunities, and the broader view continues to point towards a push towards $1.14.

Trendline resistance from the September high continues to cap any upside for now, with a move above $1.165 needed to break this line.

GBP/USD edges back from highs

Gains here have stalled for now with GBP/USD, as the price drops back from the highs of the week. Given overall USD strength this move will be watched carefully to see if it denotes a revival of GBP/USD weakness and brings a move back towards $1.34 into view, with a renewed fall below yesterday’s lows and $1.355 providing further confirmation of the bearish case.

Bulls will hope this weakness is temporary and that a move above $1.365 can take place, cancelling out the lower high scenario for now.

USD/JPY holds support

The bounce seems set to resume with USD/JPY, although the mixed day yesterday shows there is still some selling pressure to hand.

However, the textbook bounce from support at ¥111.00 does suggest a renewal of the move higher, and the bullish view remains in play unless we see a reversal back below Tuesday’s lows.

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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