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FX levels to watch – EUR/USD, GBP/USD, USD/CAD

Short-term dollar strength could be on the cards for EUR/USD and GBP/USD, yet the trend remains firmly against the greenback.

anonymous

Publication date : 2017-07-24T09:00:27+0100

EUR/USD notes

Source: Bloomberg

EUR/USD breaking lower from channel

EUR/USD is heading lower this morning dropping out of a rising channel. Given the sharp rally at the back end of last week, this current pullback seems like a breather before the pair charges higher once more.

However, should we see the pair break below the $1.1635 level, it would point towards a more protracted move, with the Fibonacci retracements drawn from $1.1479 coming into play. On the other hand, should we not break below $1.1635, it would point towards simply a slowing of the uptrend rather than a protracted break from it, with further gains likely to ensue.

EUR/USD chart

EUR/USD chart

EUR/USD chart

GBP/USD gradually regains ground

GBP/USD has seen a volatile morning, with initial losses being recovered. The rising wedge pattern we can currently see is a bearish pattern, where a break above $1.3053 would be required to negate the possibility of another move lower.

However, given the weakness we have seen leading into this current wedge, the triangle of resistance up ahead (confluence of the 76.4% retracement and two trendlines), it seems likely that we will see GBP/USD turn lower once more. That being said, the medium term remains bullish, and as such, any further downside in the short term could result in another leg higher.

GBP/USD chart

GBP/USD chart

GBP/USD chart

USD/CAD continues to channel lower

USD/CAD is grinding lower this morning, following on from yet another leg lower for the pair on Friday. This downtrend has lasted for almost three-months now, and as such, it should not necessarily be too worrying that we are seeing such consistency of selling recently.

With the expectation of further downside, any rally towards the 50-hour simple moving average (SMA) would provide a bearish selling opportunity. Thus the short-term bearish outlook remains in place unless we break through the $1.2609 swing high.

USD/CAD chart

USD/CAD chart

USD/CAD chart

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This information has been prepared by IG, a trading name of IG Markets Limited 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. International accounts are offered by IG Markets Limited in the UK (FCA Number 195355), a juristic representative of IG Markets South Africa Limited (FSP No 41393). South African residents are required to obtain the necessary tax clearance certificates in line with their foreign investment allowance and may not use credit or debit cards to fund their international account.

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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. Clients can lose more than they deposit. All trading involves risk.

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