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Dollar weakness dominates for EUR/USD, GBP/USD and USD/JPY

EUR/USD, GBP/USD, and USD/JPY finally break out, with the dollar being hit hard across the board.

EUR/USD breaks resistance to bring end to bearish outlook

EUR/USD has managed to break through the $1.1832 resistance level yesterday, bringing an end to the bearish reversal signal provided back in September.

This points towards an end to the retracement phase and likely continuation of the wider bullish trend that has dominated much of 2020. With that in mind, a bullish outlook is in play here, with a break below the $1.1760 required to bring a more neutral view.

GBP/USD looks to break higher after recent consolidation

GBP/USD has seen a somewhat smaller-scale bullish break, with the rise through $1.3024 bringing an end to the recent trend of lower highs.

With that in mind, there is a good chance we are set for a bullish break through the $1.3082 level to bring about another drive higher. However, until that happens we do still remain within this recent consolidation phase. Ultimately we need to see a break below the $1.2861 support level to negate the bullish momentum that has been playing out over the past month.

USD/JPY breakdown brings head and shoulders formation

USD/JPY has broken through the ¥105.03 support level this morning, in a move which completes the head and shoulders formation that has been playing out over the past month.

With a clear downtrend seen over the course of 2020 thus far, this is all part of a wider bearish pattern that is likely to remain for now. With that in mind, further downside looks likely from here, with a rise through ¥105.74 required to negate that current bearish view.

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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