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

The dollar appears to be coming back into favour this morning, with GBP/USD and EUR/USD both losing ground. However, with the greenback having suffered such substantial losses of late, is this just a breather before another dollar negative move?

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.
Euro and dollar notes
Source: Bloomberg

EUR/USD pulling back within uptrend
EUR/USD has managed to break higher once more yesterday, with price moving above the 76.4% retracement convincingly. Considering the wider picture, a bearish view remains in place, yet it makes sense to await a bearish reversal sign that we have not seen yet.

Given that price is currently above the 76.4% mark, it allows us space to form a topping pattern while also obtaining a good entry. Ultimately, a bearish view is held unless we see an hourly close above 1.1418. The next important levels of support, which would need to be broken to undermine recent gains, are $1.1305 and $1.1236.

GBP/USD breaking lower from resistance
IN_GBPUSD is selling off sharply this morning, following a rally into the crucial $1.3175 resistance level. Price has since completed an intraday head and shoulders pattern, sending price down to trendline support.

There is a potential that this represents a reversal, yet for now we have not seen signs of this and therefore, we look at it as a temporary pullback before another move higher. 

USD/JPY consolidating in triangle pattern
IN_USDJPY has been consolidating since the downturn earlier in the week, with the pair forming a symmetrical triangle pattern. The breakout from the pattern will give us our lead, with an hourly close above ¥100.50 or below ¥99.84 providing the clues of where the pair is going next.

Given the bearish move into this pattern, the preference is for another move lower, with a break below ¥99.84 looking towards the ¥99.54 support level. Alternately, an hourly close above ¥100.50 would look towards ¥101.20 for a potential wider double bottom formation to come into play.

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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.