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EUR/USD, GBP/USD and USD/JPY driven by dollar weakness ahead of NFP

The dollar heads lower, with EUR/USD, GBP/USD and USD/JPY all being dictated by weakness in the greenback.

EUR/USD continues to regain ground

EUR/USD managed to break through the key $1.0959 level yesterday, bringing about a more bullish short-term view for the pair.

That inverse head and shoulders formation points towards likely upside for now, yet this is most likely a retracement of the decline from $1.1111. With that in mind, further upside looks likely from here, with a rally into the zone between the 61.8% and 76.4% Fibonacci levels looking likely ($1.1021-$1.1055).

GBP/USD breaks resistance to bring more bullish outlook

GBP/USD managed to break through the important $1.2346 level yesterday, negating the short-term downtrend that has been in play.

This makes sense as it conforms with the dollar’s negative view we see elsewhere. As such, we now look for further upside to come into play, with a break below $1.2265 required to bring about a more bearish view.

USD/JPY completes double top formation

USD/JPY managed to break below the critical ¥106.96 support level yesterday, bringing about a completion of the double top formation that has been building.

The wider long-term trend is bearish, and this break points towards a continuation of that primary downtrend. With that in mind, watch out for further downside from here, with a break through the ¥107.30 level required to signal a short-term rebound to retrace that wider decline from ¥108.47. Until then, short-term gains are likely to be sold into.

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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