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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 is in charge this week, with EUR/USD and GBP/USD falling amid gains for the USD/CAD pair. However, with the release of jobs data this afternoon, what levels should we watch?

Canada dollar
Source: Bloomberg

EUR/USD breaks into new low

EUR/USD managed to break lower once more overnight, with a fall below the $1.1696 level providing a continuation signal of the recent downtrend. With that in mind, further downside is likely. However, with trendline support in view, it makes sense to await a potential retracement of yesterday’s drop before looking for shorts once more.

With the pair trading in a falling wedge, there is a good chance that the eventual breakout will come towards the upside. However, for that to come into play we would need to see a break up through $1.1788.

GBP/USD descent continues apace

GBP/USD has dropped sharply over the past week, with the support level of $1.3154 being broken to provide a wider bearish outlook. This points towards further downside over the medium term. However, for now this market is in a tricky place for traders. New positions would have to contend with the potential of a retracement of the fall from the last swing high of $1.3292.

As such, the best bet for shorts is to wait for a continuation pattern and utilise that to obtain a closer stop. As such, while further downside seems likely, it makes sense to await a pullback or continuation pattern to place positions.  

USD/CAD spikes higher from trendline confluence

USD/CAD has broken higher following a pullback into a confluence of trendline and Fibonacci support. This keeps the recent uptrend alive, with the pair heading towards the crucial $1.2663 resistance level. Given the rather extended nature of this move, we could start to retrace again before long. However, unless we break below $1.2449, such a pullback would be expected to represent a buying opportunity.

With both US and Canadian jobs data released in the afternoon, volatility is expected to ramp up sharply. With that in mind, keep an eye out for the $1.263 level, which if broken, would lead to a wider bullish reversal signal. 

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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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