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

With the US out of the picture today the FX market could be an interesting arena. USD/JPY’s downtrend could be reasserting itself, while cable will be hesitant ahead of the UK services PMI number.  

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

GBP/USD could find support at 200-hour SMA

Today’s services PMI is likely to provide plenty of volatility, so with the pair back nearing the top-end of its post-Brexit range (around $1.34) then the release might prompt some weakness. Nonetheless, the trend has been to buy cable since the August lows, so any sudden drop today might provide a buying opportunity.

Some support could be found around the 200-hour simple moving average ($1.3182), with the initial target for any bounce coming in at $1.3150. 

EUR/USD could drop to August lows

So far the pair has yet to see a new lower low, but given the way Friday’s spike was firmly sold another test of the low of last week around $1.1120 cannot be ruled out.

Nonetheless, a move through $1.12 would seem to put the buyers back in charge. A move below $1.1120 would suggest a drop down to the August lows of $1.1050, with the next level below here being $1.0950.

USD/JPY could target ¥105.30

Although we did not see a new lower low during August in this downtrend, it looks like the ¥104 area is providing resistance. A rolling over here would suggest that the price could head back to the key ¥100 level, particularly if it heads back below the 50-day SMA (¥102.68).

Any rally needs to clear ¥104, with the next target for any bullish momentum being the 100-day SMA at ¥105.30 for IN_USDJPY.

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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.