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

Bank of Japan and FOMC announcements bring significant volatility for the dollar, with EUR/USD and GBP/USD breaking higher. Will this continue or are we seeing a reversal back onto the long-term downtrend?

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.
US dollars and Japanese Yen
Source: Bloomberg

EUR/USD turns lower from Fib resistance

EUR/USD pushed into the key $1.1246-$1.1279 resistance zone, with the pair subsequently turning lower yesterday. This is likely to mark the top for this market, given the bullish connotations of a move through $1.1284.

As such, while we could see further short-term upside, this is expected to be fleeting, with a break back below the overnight low of $1.1193 providing confirmation of the reversal back onto the long-term downtrend.

GBP/USD could be due another rally

IN_GBPUSD has managed to break through the key $1.3091 swing high; the first time the pair has created a new higher high this month. This could pave the way for another leg higher despite the bearish medium-term outlook.

With that in mind, we will be looking at how price reacts to the $1.2987 support level. Ultimately, we would need a break back below $1.2946 to bring the bearish view back into play and until that happens, we could see another leg higher off the back of yesterday’s break higher.

USD/JPY in recovery phase following sell-off

IN_USDJPY is moving higher, following on from the Bank of Japan fueled move lower on Wednesday. The key thing to note is the pair remains within a downtrend, with our multi-month descending trendline holding up once more.

As such, this current move higher is perceived as an opportunity to get short at a better price. Ideally, we would see a move into ¥101.98 or ¥102.15 to provide a good risk/reward ratio. 

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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.