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

US dollar weakness is once again in play, with EUR/USD and GBP/USD seeking to extend their gains. USD/JPY is also turning lower following a brief rally this week.

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.
Pound and dollar
Source: Bloomberg

EUR/USD flag points to further gains

EUR/USD is back on a positive path, rallying heavily this week, with price breaking through the crucial $1.1335 resistance level yesterday. We are seeing a retracement coming into play currently, yet given the shallow slant of this move, it looks more like a continuation flag than anything indicative of something more bearish.

As such, further gains are expected, with $1.1465 the key resistance level to break for yet another higher high. This bullish outlook remains in play unless we see a move below $1.1335 for the short-term view and $1.1059 for the medium-term view.

GBP/USD runs into trendline resistance

The IN_GBPUSD rally has hit the buffers overnight, with a doji candle at trendline resistance marking the top for now. However, we have now come back to the previous April peak at $1.4348 which coincides with the 23.6% pullback.

Thus the exit from this triangle will dictate direction for the day, where a break through trendline resistance would look towards $1.4459 as the next key resistance level.

Alternately, a closed hourly candle below $1.4348 would point towards a deeper retracement, with $1.4309, $1.4275 and $1.4241 the next important support levels in view.

USD/JPY at crucial support level

IN_USDJPY has tumbled lower since hitting the 61.8% retracement at ¥109.49. We have since seen the creation of lower highs and lower lows, bringing price back to the 38.2% retracement and ¥108.73 support level.

Given that this support level has been respected a number of times, the ability or inability to break through ¥108.73 is expected to dictate the state of play today.

An hourly close below this level would look towards ¥108.44 and ¥107.83 as the next support levels of note. Alternately, we would need to see an hourly close above ¥109.12 for things to look a little more bullish, with ¥109.49 the next key resistance 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.

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