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CFDs are complex financial instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money. CFDs are complex financial instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.

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

The dollar’s ascendancy seems to have come to a halt as we start 2017. However, is this just a fleeting move or indicative of something more long-lasting?

US and Canadian dollars
Source: Bloomberg

Will EUR/USD sell-off last?

EUR/USD has seen significant selling to kick off 2017, falling 0.9% since yesterday’s open. The break below $1.0462 in December seemed to highlight the potential for a sharp deterioration in January. However, the rally back above that level brings the possibility of a resurgence.

With that in mind, the bearish outlook comes back into play with a break back below $1.0372. Until then, there is still a very real possibility of a rebound, and with the pair now trading below the 76.4% pullback, this seems like an interesting area for bulls. 

EUR/USD price chart

Does the GBP/USD rebound have legs?

GBP/USD has been gaining ground in the final week of 2016, with the pair crucially breaking through the $1.2302 resistance level. Given that creation of a new high, there is a chance we are seeing a resurgence for the pair.

Watch out for trendline support close to current price, with a break below $1.2200 required to negate any bullish intent created by last week’s rally. 

GBP/USD price chart

USD/CAD trending lower once more

USD/CAD has been weakening over the past five trading days, in what looks like a market turning towards the lower end of an ascending channel which has been in place for eight months.

With that in mind, further downside is expected, with a move back below C$1.3388 pointing towards a return to the C$1.3323 region. This bearish outlook remains in play unless we see a break back above C$1.3457, which would bring a more neutral view.

USD/CAD price chart

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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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