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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 is trading at a key resistance level, while USD/JPY approaches a support level which could give way to 14-month lows. Meanwhile, EUR/GBP is approaching a crucial breakout level.

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Key resistance rallied for EUR/USD

EUR/USD has managed to bounce up to the $1.2334 resistance level overnight, with the price starting to show signs of weakness.

This is the clear near-term resistance level to watch out for, with the overbought stochastic starting to roll over. A break through $1.2334 would point towards a wider rally, with the possibility of a deeper retracement of the $1.2523-$1.2205 sell-off on the cards.

EUR/GBP close to crucial breakout level

The pair has managed to rally further overnight, with EUR/GBP coming close to the £0.8910 high, which would negate the descending channel in place over the past four months.

With trendline support currently being challenged, a break lower from here could begin a bearish phase for the pair. The upcoming UK consumer price index (CPI) reading will likely have a significant impact on whether we break above £0.8910 (bullish), or below trendline support (bearish). For greater confidence of a bearish shift, look out for an hourly close below £0.8843.

Breakdown for USD/JPY brings us towards key support

USD/JPY has managed to fall out of its recent descending triangle formation, with the price hitting a new five-month low.

While this does bring a bearish continuation signal, it is worthwhile noting that the pair is approaching an even more important support level, in the form of ¥107.31. A move below that level would bring about a 14-month low for USD/JPY. As such, watch for a response at ¥107.31 to guide price action over the medium term. 

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