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Dollar strength continues to drive EUR/USD, GBP/USD and USD/JPY

EUR/USD, GBP/USD and USD/JPY continue to trade on dollar strength, with markets now turning their eye to the US jobs report.

EUR/USD breaking lower

EUR/USD has dropped into the 76.4% Fibonacci support level this week. However, despite initial support found yesterday, we are seeing another break lower this morning that could signal a possible bearish reversal coming into play.

The downtrend seen over recent years does highlight a likely breakdown before long. However, we have to await a break below the $1.1067 low to confirm the end of this recent uptrend. As such, with the price breaking lower, keep an eye out for whether we see a decline below the $1.1067 level as a guide on where we go from here.

GBP/USD falls back, yet Fibonacci is in sight

GBP/USD is easing back once again this morning, following on from a move higher yesterday. The decline seen throughout the past week could be a retracement, given the respect of the 61.8% Fibonacci level last week.

With that in mind, the current trend of lower highs could take us into another leg lower and a move into the 76.4% retracement at $1.2994. While the short-term outlook is bearish, the impending US jobs report is likely to provide volatility. Thus, watch for whether we break either $1.2905 or $1.3212 as a signal of where we go in the medium term.

USD/JPY rises back into key resistance level

The USD/JPY resurgence has taken us back towards the December peak of ¥109.71, with the price now trading around a wider trendline resistance.

That signals a potential reversal point, but also a possible breakout coming into play. With that in mind, watch out for whether we see a break above ¥109.71 (bullish), or below ¥109.32 (bearish) to highlight where we go from here.

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

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