Skip to content

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.

EUR/GBP and USD/CAD drop back, while GBP/USD edges higher

Euro continues to make gains against the pound, while a weaker dollar gives space for GBP/USD to edge higher and for USD/CAD to drop back from its recent high.

Bank notes Source: Bloomberg

​EUR/GBP edges back from higher high

EUR/GBP is dropping back from the high of Monday’s session but with the higher low of April and now the higher high of May, breaking above the late-March high and trendline resistance, it looks like a trend change is at hand.

In addition, the European Central Bank (ECB) is now talking about rate hikes in July, so while it is behind the Bank of England (BoE) in its moves to tighten policy, the future points towards higher rates in the eurozone. The UK economic outlook is also weakening too, putting pressure on the pound. All in all, it looks like even a drop back towards £0.84 would still leave the uptrend intact and provide space for a higher low and a fresh upward move.

EUR/GBP chart Source: ProRealTime
EUR/GBP chart Source: ProRealTime

GBP/USD edges higher after initial losses

GBP/USD remains fairly close to the lows of the week, with little sign of a major move higher, despite the small gains today.

A move above $1.24 might help to suggest a short-term low is in play, but even with this the longer-term downtrend is firmly in place. Given the UK outlook, which suggests that the next two years may see little to no growth, or even contraction, the pound may struggle to build much upside against the US dollar. Additional downside would develop with a drop below $1.225, pushing the pair towards fresh two-year lows.

GBP/USD chart Source: ProRealTime
GBP/USD chart Source: ProRealTime

USD/CAD drops back below C$1.30

After surging over the past few days the USD/CAD price has retreated, but having carved out a higher high, the uptrend of the past year remains firmly intact.

High stochastic and moving average convergence/divergence (MACD) readings point towards strong upside momentum, although a drop back below C$1.29 would suggest additional short-term weakness is at hand. Nonetheless, the pair’s upside case remains in place, as the Federal Reserve (Fed) looks to tighten policy over the medium term.

USD/CAD chart Source: ProRealTime
USD/CAD chart Source: ProRealTime

This information has been prepared by IG, a trading name of IG Markets Ltd and IG Markets South Africa Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

Start trading forex today

Trade the largest and most volatile financial market in the world.

  • Spreads start at just 0.6 points on EUR/USD
  • Analyse market movements with our essential selection of charts
  • Speculate from a range of platforms, including on mobile

Find out more

Live prices on most popular markets

  • Forex
  • Shares
  • Indices

Prices above are subject to our website terms and agreements. Prices are indicative only

Plan your trading week

Get the week’s market-moving news sent directly to your inbox every Monday. The Week Ahead gives you a full calendar of upcoming economic events, as well as commentary from our expert analysts on the key markets to watch.

You might be interested in…

<h3>How much does trading cost?</h3>
<h3>Find out about IG</h3>
<h3>Plan your trading</h3>

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.