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

Dollar weakness is driving markets at present, as geopolitical concerns rise. A break below key support for USD/JPY is particularly noteworthy.

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 looking strong

Further gains reinforce the impression that euro bulls have returned. The recovery yesterday of the rising daily trendline underscores this point.

EUR/USD still needs to take out $1.0635 on the intraday charts to create a new higher high, but the signs look good. Above $1.0635 the next target would be the $1.0680/$1.07 area. A bigger move higher would still target the 200-day simple moving average (SMA) at $1.0850. Only a close below $1.0570 negates this bullish outlook.

GBP/USD facing a test

The longer-term narrowing wedge that prevails here is about to be tested once again, with the possibility that further sterling strength will push GBP/USD to the descending trendline, around $1.0565. 

USD/JPY dropping

The drop below ¥110.11 would likely point towards much greater downside from this point onwards. The possibility is that USD/JPY will drop to the 200-day SMA at ¥108.70, or even down to ¥107.45, the high from July.

It would need a recovery back above ¥110.11 to reverse the bearish outlook, and even then a move back above ¥112 would be needed to create a new higher high on the short-term charts. 

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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.