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

Federal Reserve minutes weakened the US dollar, providing a short-term respite for key risk currencies.

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 coins and dollar notes
Source: Bloomberg

GBP/USD
All eyes will be on the $1.28 level, yesterday’s low, to see if the downward pressure continues. Doubtless some will think that there is some upward movement coming, although the cautious will wait for a close above $1.30.

The pair continues to hover in oversold territory, with a bounce suggesting a move to $1.35 or $1.36. A break below $1.28 would still leave this cross in the support-light zone between the current level and the 1985 lows. 

EUR/USD
Dovish Fed minutes have given the currency a breathing space, although EUR/USD remains stuck below the 200-day simple moving average ($1.1096). A push below yesterday’s low around $1.1025 would suggest we see a further drop towards the post-Brexit lows towards $1.09.

A bounce would need to clear $1.1150, where gains stalled at the end of June (also the 16 June low), and then on to $1.12 and then $1.1350.

AUD/USD
Despite the recovery in AUD/USD yesterday, the pair proved unable to push on above the 4 July high just below $0.7550. If momentum stalls here then we could see a test of yesterday’s low near $0.74, with a close below here opening the way to potential support at $0.73.

A bounce must clear $0.7550 and would then head towards the 23 June peak towards $0.7650.

USD/JPY
It looks very much like the next downward move in the 2016 dollar-yen downtrend is beginning, with Fed minutes providing the fundamental catalyst. The bounce took the pair away from ¥100, but a close below here would take the pair on towards ¥99.

A bounce needs to clear ¥101.80 in the first instance, and then on towards the 30 June peak around ¥103.40, although we would continue to expect further downside here. 

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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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