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Dollar weakens as EUR/USD, GBP/USD strengthen, while USD/JPY heads lower

EUR/USD, GBP/USD and AUD/USD gains look at risk, with Fibonacci retracement levels playing a key role in a potential move lower.

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EUR/USD starting to flounder around key resistance

EUR/USD has managed to push back towards the top end of the recent range formation, with the pair remaining within the wider $1.1602-$1.1920 range that has dominated since the beginning of September. With the pair slowing its ascent, there is a good chance we will soon turn lower once again to maintain this range.

The decline into $1.1814 on Thursday highlights the slowing ascent, with the pair continuing to struggle with the $1.1893 level since. As such, it could be worth watching for a bearish reversal signal with a break below the $1.1814 level. To the upside, we would need to break through the $1.1920 level to bring about a bullish continuation signal.

EUR/USD chart Source: ProRealTime
EUR/USD chart Source: ProRealTime

GBP/USD breaks resistance to bring multi-month high

GBP/USD been on the rise once again this morning, with the pair breaking into the highest level seen since the beginning of September.

This pair is trading within a clear uptrend seen over the course of the past two-months, of which this latest rise is just the latest leg within that trend. As such, further upside looks likely, with a break back below the $1.3195 swing low required to bring about a bearish reversal signal.

GBP/USD chart Source: ProRealTime
GBP/USD chart Source: ProRealTime

USD/JPY decline pauses, yet downtrend persists

USD/JPY has paused for a breather after a period of significant declines since the 11 November peak.

With the pair trading within a long-term downtrend, we look likely to see further weakness play out as we move forward. For the short term, a break through the ¥104.21 swing high would be required to signal a potential intraday bounce coming into play.

USD/JPY chart Source: ProRealTime
USD/JPY chart Source: ProRealTime

This information has been prepared by IG, a trading name of IG Markets Ltd and IG Markets South Africa 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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