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CFDs are complex instruments. 70% of retail client accounts lose money when trading CFDs, with this investment provider. You can lose your money rapidly due to leverage. Please ensure you understand how this product works and whether you can afford to take the high risk of losing money.

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

The dollar has been strengthening against the euro and pound, yet there are key levels to be broken to signify directional bias for the likes of GBP/USD and USD/JPY.

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USD/JPY GBP/USD Euro Pound sterling Japanese yen EUR/USD

EUR/USD drifting lower after recent rally

EUR/USD has begun to drift lower during the latter part of the week, heightening the chance of a wider retracement coming into play once again.

A break below the $1.1484 support level would signal a likely impending retracement of the wider rally from $1.1301. However, until that happens, there is a good chance that we will continue the short-term uptrend that remains in play.

EUR/USD chart
EUR/USD chart

GBP/USD rolling over after failed rally into resistance

GBP/USD failed to break through the $1.2812 resistance level earlier in the week. That provides us with a signal that we could see the pair roll over once more, with a trendline break seen this morning adding to that possibility.

Watch for an hourly close below the $1.2706 level for confirmation of a short-term bearish outlook.

GBP/USD chart
GBP/USD chart

USD/JPY awaiting break to signal next move

USD/JPY is turning lower again this morning, following on from a rebound yesterday.

There is a good chance we will see further gains to come over the medium term, yet with the sharp rally seen in the first week of the month, a deeper retracement before such a rally looks a distinct possibility. As such, watch for a break below ¥107.77 as a bearish short-term signal for the pair. Conversely, a rally through ¥109.09 would signal a bullish view from here.

USD/JPY chart
USD/JPY chart

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