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

The dollar gains ground after a breakthrough for tax cut prospects. However, with EUR/USD, GBP/USD and USD/JPY facing key hurdles, the stage is not yet set for a breakout.

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.
Dollar and yen
Source: Bloomberg

EUR/USD turns lower from SMA resistance

EUR/USD has begun weakening from the 200-period (4-hour) simple moving average (SMA), which has been a highly reliable indicator over recent weeks. Coming off the back of a retracement and rebound, there is still a good chance we could move higher from here.

However, the key here is whether we see another break through yesterday’s high and the 200-SMA to signal a continuation of the recent rebound. To the downside, the risk is that we break below $1.1662 to form a wider head and shoulders formation.

GBP/USD turning back towards key support zone

GBP/USD has been selling-off throughout the week, with trendline support coming into view once more. The low of $1.3030, coupled with the ascending trendline, points towards a crucial area where this market could rebound once more.

With the break below $1.3121, it looks likely that we will see further downside. Yet, look out for how the market reacts to that trendline and horizontal support zone, as a gauge of whether the market is due to bounce or continue lower. Conversely, a move through $1.3228 would signal that this downturn is over.

USD/JPY breaking higher once more

USD/JPY is continuing to move higher following the bullish breakout seen over the past few days. The push through ¥113.15 is a significant step towards a bullish breakout, with the ¥113.44 needing to be broken for the market to embark on another bullish breakout.

Should that occur, the ultimate aim would be to push through ¥114.37 to establish a wider bullish outlook. To the downside, we would need to see the price fall below ¥112.29 to negate this bullish view.

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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.