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FX levels to watch: EUR/USD, GBP/USD and USD/JPY

The bounce in USD/JPY bodes well for a recovery in risk appetite, but the pound has taken fresh losses against the US dollar.

EUR/USD still in bearish mode

The EUR/USD pair has continued to decline over the past week, with an overnight rally towards $1.117 running into resistance.

Further declines head towards $1.112, the lows from the end of April, while additional declines target $1.10 and then $1.085. A firm rebound requires a move back above $1.117 and $1.118, the previous lower highs.

GBP/USD slumps in early trading

Hopes that the GBP/USD pair was bottoming out yesterday appear to have been dashed, as it drops lower in earlier trading.

A relentless decline over the past two weeks has seen a series of lower highs, but a move above $1.275 would be a good first step in restoring a more bullish view.

USD/JPY continues to rally

A recovery continues here for USD/JPY with higher lows in place, indicating buying pressure.

Pullbacks towards rising trendline support from the 13 May low would provide buying opportunities, while a close back above ¥110.35 would also help reinforce the bullish view. A close below ¥109.60 would suggest the recovery has run its course.

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