CFDs are a leveraged product and can result in losses that exceed deposits. Please ensure you fully understand how CFDs work and what their risks are, and take care to manage your exposure. CFDs are a leveraged product and can result in losses that exceed deposits. Please ensure you fully understand how CFDs work and what their risks are, and take care to manage your exposure.

Will the dollar continue to dominate after Fed-led moves for EUR/USD, GBP/USD, and USD/JPY?

Dollar strength sparks EUR/USD and GBP/USD weakness, although USD/JPY has managed to claw back much of that initial FOMC-led move.

​EUR/USD at risk of further downside

EUR/USD has been attempting to consolidate overnight, following a period of a dramatic weakness in the wake of the FOMC meeting. That collapse on the pair has been driven predominantly by a stronger dollar, but that move may not be over quite yet.

The decline we have seen over recent hours does point towards a potential bearish continuation, with a break back below $1.1892 bringing greater expectations of another move lower. Alternately, a break up through the $1.1925 level would point towards a likely retracement of the selloff from $1.2006 coming into play.

GBP/USD slumps in early trade

GBP/USD has continued the declines seen over the course of the week, with the pair falling back into a six-week low. The capitulation of this pair may not be over quite yet, with the trend of lower highs crucial to the current bearish trend.

For now, there is a chance we could come into another upward retracement phase given the recent decline, with a rise up through $1.3944 required to bring about a wider bullish picture. Until that level is taken out, there is a good chance that the pair weakens further before long.

USD/JPY continues to weaken after jobless claims rise

USD/JPY has seen plenty of volatility over recent days, with the FOMC-led rally on Wednesday being followed up by a sharp pullback after a disappointing rise in the US jobless claims figure.

While we do still have a bullish trend in place, the current break below 76.4% Fibonacci support does point towards a potential wider retracement of the rally from ¥109.19 coming into play. As such, while the bulls are expected to return soon, the question of when that comes is dependent upon whether we see ¥109.80 broken or not. ​

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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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