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

The euro’s rally has come to a key resistance level, while cable faces the choice of two trendlines. 

CFDs are a leveraged product and can result in losses that exceed deposits. Trading CFDs may not be suitable for everyone, so please ensure you fully understand the risks and take care to manage your exposure.
Dollar and pound sterling
Source: Bloomberg

EUR/USD surge hits key level

EUR/USD’s spike to the $1.1858 level has brought out the sellers, with the risk being that this rally has run its course. A bullish signal will be a move back to $1.1858, and a close above this, and then ideally above the October high at $1.1879. This would then open the way to the $1.20-$1.21 peak from September.

 A turn lower targets $.1662, and then $1.1574. The four-hour chart has seen its downtrend from the September high broken, so the retracement overnight may see the line tested from above, before moving higher.

GBP/USD stuck between a rock and a hard place

GBP/USD continues to respect the downtrend line off the September highs, with rallies having been sold. Now, however, the price is running towards the rising trendline from the March lows.

A break below this, and then through $1.31, will target the November low at $1.3050, and then down to $1.2811. A move back above $1.32 will then see $1.3268, and then $1.3341 tested. 

USD/JPY recovers and aims to move higher

A steady pullback for USD/JPY has bounced off the 50-day simple moving average (SMA) at ¥112.56, with a follow-through from this likely to target ¥114.00 and ¥114.37.

A close below the 50-day SMA would suggest a deeper retracement, to the key ¥111.68 level. 

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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.