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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 – GBP/USD, EUR/USD, USD/JPY

After a pullback, cable appears to be on the move higher, while USD/JPY has hit a key inflection point.

US dollar and Japanese yen notes
Source: Bloomberg

GBP/USD buyers appear to be in charge

Having hit $1.24 late on 17 January, the pair dropped back towards $1.2250 before finding fresh buyers. It then broke through the descending hourly trendline that could have constituted resistance. We now look to see if it can move above $1.2356 and then $1.24.

Above here the $1.26 level is the next area to watch. The sharp rally earlier this week would seem to indicate the buyers are now in charge. It will take a daily close below $1.22 to dispel this notion.

GBP/USD price chart

EUR/USD uptrend remains

Despite failing to break $1.07 earlier in the week the uptrend here may not be done yet. The dip overnight took the price to $1.0620, before buyers stepped in.

A move higher will need to clear $1.07 and then push towards $1.0733 and $1.0824. A drop below $1.06 would begin to suggest that the bounce has run its course. 

EUR/USD price chart

USD/JPY pullback looks to be coming to an end

We may be seeing the end of the USD/JPY pullback, particularly if the price can hold above Y114.50. A close above Y115 would open the way to the Y116.76 level, and then on to Y119.

However, with the price overextended in the hourly time frame some profit-taking may be in evidence. Nonetheless, sellers will need to get the price below Y114, and in short order, to avoid momentum shifting to the upside. 

USD/JPY price chart

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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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