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

EUR/USD looks to be taking a breather following the sell-off throughout the earlier part of the week. Meanwhile, EUR/GBP has sold off into trendline support, with USD/JPY consolidating within a triangle formation.

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EUR/USD looks set for another move lower

After a sharp move lower on Wednesday, EUR/USD has been consolidating. This points towards further downside, where the existence of trendline resistance could bring a move in the near future.

Interestingly, we have a clear resistance level at $1.2295, which if broken would likely lead to a more bullish short-term picture. Nevertheless, unless the price breaks above $1.2406, such a bounce would look like a temporary retracement within a wider bearish move.

EUR/GBP bounces from trendline support

The price moved into trendline support after EUR/GBP sold off sharply from the £0.8900 resistance level.

While we are moving back to the downside, there is a chance that this sell-off will respect the wider descending channel once again in the case of seeing further downside. With that in mind, watch for whether the price can break below trendline support, at which point backing comes in around £0.8689. Alternately, a break above £0.8820 would bring a more bullish short-term view.

USD/JPY continues consolidation

A consolidation period remains for USD/JPY, with the price respecting both trendline support and resistance, forming a symmetrical triangle formation.

The breakout from this pattern will come with a push above ¥109.78, or below ¥108.28. Until then, watch out for the continued respect of trendline support and resistance. Given the bearish wider view, it makes more sense selling at trendline resistance, than buying at the bottom.

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