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

The dollar is back in charge, with the Fed expected to raise rates again later today. With EUR/USD and GBP/USD turning lower, and USD/JPY pushing higher, it seems there is likely to be further USD upside yet.

EUR/USD falls towards key support level

The pair has been drifting lower in the first half of the week, with EUR/USD moving into a support level that is pivotal for the short-term outlook.

That $1.1727 support level is going to be the key level to watch today, for a break below there would complete a lower low and accompany the lower high set yesterday. As such, an hourly close below $1.1727 would provide a bearish short-term outlook to coincide with the wider bearish outlook. Otherwise, a rally above $1.1837 would signal a likely continuation of the recent rebound.

GBP/USD reversing recent gains

GBP/USD is continuing its decline this morning, with the pair reversing the rebound we saw last week.

With the price approaching trendline support, there is a chance of another short-term bounce into trendline resistance. However, until we break above $1.3425, a bearish short-term picture is in play.

USD/JPY continues to extend breakout

USD/JPY has been steadily climbing after the break through the crucial ¥110.27 swing high.

That break signifies a likely resurgence of that pair and negates the breakdown below ¥108.64 in late May. With that in mind, further upside looks likely, with a fall below ¥110.10 required to bring about a bearish short-term outlook. At which point we would be looking at a likely retracement of the rally up from ¥109.19.

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