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CFDs are complex financial instruments and come with a high risk of losing money rapidly due to leverage. 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 financial instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.

FX levels to watch: EUR/USD, GBP/USD, USD/JPY

Dollar strength is back to stalk markets, wiping out some of yesterday’s gains in EUR/USD and sending GBP/USD down once more. Meanwhile, USD/JPY remains content to hold above the 50-day moving average.

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EUR/USD rally peters out

The sellers are attempting to take charge again, pushing EUR/USD back from yesterday’s highs. They still have to break the $1.15 support zone, which would mark a particularly bearish development.

A possible first area of support in case of any sustained downturn comes in at $1.1285. For the time being, the bearish view continues to hold unless the price can recover $1.1630 and then move above the pattern of lower highs that has dominated since May. This would require a move above $1.1760. Any rally that fails to recover this level would likely constitute another selling opportunity.

EUR/USD chart

GBP/USD’s fall still not done

Cable at present provides a perfect demonstration of ‘what goes down…can keep going down’. There seems little stopping GBP/USD’s descent, particularly since the ‘No Deal Brexit’ background music remains in full flow.

Areas of possible support come in at $1.2773 and then $1.26, while even $1.32 looks like too distant a prospect at present. Any bounce that fails to move back above $1.3040 would constitute another selling opportunity, with a bullish view only forming if the price can close above the July highs around $1.32.

GBP/USD chart

USD/JPY fights to hold moving average

Dips for USD/JPY to the 50-day simple moving average (SMA) at ¥110.88 continue to find support, with the fall yesterday being countered to some extent this morning.

A move above ¥111.50 would break the short-term downtrend from the July highs, and open the way to the peak above ¥113.00 seen just over three weeks ago. A break below the 50-day SMA and below ¥110.63 would signal a more bearish move, opening the path to ¥110.00 and lower. 

USD/JPY chart

This information has been prepared by IG, a trading name of IG 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. 

CFDs are a leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your initial deposit, so please ensure that you fully understand the risks involved.

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