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CFDs are leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your deposits, so please ensure that you fully understand the risks involved. CFDs are leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your deposits, so please ensure that you fully understand the risks involved.

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

EUR/USD and EUR/GBP both hit resistance, pointing towards potential downside. Meanwhile, USD/JPY looks set to continue its wider downtrend.

GBP
Source: Bloomberg

EUR/USD turning lower from trendline resistance

The pair has been attempting to break through trendline resistance this morning, with EUR/USD having bounced from the key $1.2334-$1.2323 support zone.

A fall below there would create a double top formation, bringing a bearish outlook for the short term. However, until we break that level, there is always a chance we will push back into the bullish long-term trend. For greater directional confidence, watch for an hourly close above $1.2434 (bullish), or below $1.2323 (bearish).

EUR/GBP hits channel resistance

The price hit the £0.8900 target area this week, with EUR/GBP rallying up to the top of its channel.

This has brought about two successive indecision/reversal candles; a long legged doji, and a shooting star. This raises the likeliness of a reversal lower from here, with traders clearly paying close attention to the descending trendline dating back to early October. Watch out for a potential breakdown from here, with a push above £0.8929 required to signal a bullish breakout.

USD/JPY selling off from trendline resistance

Following the sell-off from trendline resistance last Friday, USD/JPY is moving lower once more this morning.

Given the wider bearish trend in play, there is a strong chance we could see this pair fall back below the ¥108.28-¥108.45 support zone. With that in mind, a bearish outlook is in play, with a fall below ¥108.28 providing greater confidence that this recent retracement phase is over. 

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