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

The dollar remains on the front foot against European currencies, yet with political turmoil in Italy helping push demand for havens, we are seeing the yen continue to gain ground against the dollar.

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EUR/USD approaching huge support level

EUR/USD has continued its decline, with the pair hitting a six-month low in early trade today. That brings us within touching distance of the critical $1.1554 support level, where a break below there would point towards a hugely significant bearish shift for the long-term picture.

As such, keep an eye out for how we respond to that $1.1554 support level if selling persists, with a break and close below it pointing towards further downside to come. A break through the $1.1728 swing high would be required to negate the bearish trend currently in play.

GBP/USD continues to drift lower

GBP/USD is selling off once again this morning, following on from a downtrend that has lasted over a month now. That trend looks likely to persist as we go forward, with the dollar ascent showing little signs of slowing.

With trendline resistance playing a role earlier today, there is a good chance that any near-term rebound would similarly respect that descending trendline. A bearish outlook remains in place unless we see the price break above the $1.3422 swing high.

USD/JPY breaks lower yet again

USD/JPY provides a break from the wider trend, with the yen really showing its strength by dragging the pair further down into a three-week low.

The pair is now approaching the crucial ¥108.64 support level, which if broken would provide confirmation of a wider bearish outlook. For now, a bearish view remains in play unless we push through the ¥109.75 swing high from last week.  

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