FX levels to watch: EUR/USD, GBP/USD and USD/JPY
Sterling is the big loser this week, with political concerns driving the pound lower. Meanwhile, the dollar rally is expected to continue to impact the likes of EUR/USD and USD/JPY.
EUR/USD declines into crucial support level
EUR/USD has continued its declines this week, with the pair falling into the $1.1135 swing low to heighten the chance of further downside.
The wider downtrend of lower highs and lower lows remains in place, pointing towards a break below $1.1112 before long. However, the ability to break out of the recent trend of higher lows was required. We now have that. Watch for whether we can break below this $1.1135 support level or not, with a rebound expected to be a retracement of the decline from $1.1264. It makes sense to watch for the response to this level, with the pair expected to break below this level either now or in the near future.
GBP/USD continues to decline amid political upheaval
UK Prime Minister Theresa May’s time as prime minister looks to be over, and sterling seems to be going down here. Significant market uncertainty means we will likely see further downside to come from here for GBP/USD.
The continued creation of lower highs and lows points towards a downtrend which is expected to continue for some time yet. There is talk of markets selling the rumour and buying the fact, bringing about a chance of a GBP rebound once she goes. However, it makes sense to simply follow the chart rather than speculate. The creation of lower highs remains key here, and thus as long as we remain below the $1.2695 level, a bearish outlook remains in play.
USD/JPY declines beyond trendline, yet bulls wait to pounce
USD/JPY has continued to drift lower over the past two days, with the price falling below trendline support.
However, that does not necessarily negate the uptrend that has been in play on the intraday charts. The creation of lower highs and lows is key here, with a break through the ¥110.36 level key to providing a more bullish outlook for the short term. Be aware that we have a long-term descending trendline up ahead as resistance. However, until we break below ¥109.81, the short term uptrend remains intact.
IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.
The information/research herein is prepared by IG Asia Pte Ltd (IGA) and its foreign affiliated companies (collectively known as the IG Group) and is intended for general circulation only. It does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit.
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. Please see important Research Disclaimer.
Please also note that the information does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any views and opinions expressed may be changed without an update.
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
Live prices on most popular markets
- Forex
- Shares
- Indices
See more forex live prices
See more shares live prices
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.
See more indices live prices
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 20 mins.
