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

Sterling is still enjoying a run of gains, but USD/JPY has been hurt by a softer outlook for Fed policy and Trump’s tweets about trade negotiations.

EUR/USD edging higher

The EUR/USD pair rallied off last week’s lows and is now pushing back towards trendline resistance from the March highs, which would suggest resistance around $1.124.

A push above $1.125 would signal a break higher, targeting $1.134 and then $1.145. A move back below $1.12 resumes the downward trend, targeting $1.112 in the first instance.

GBP/USD still in bullish form

The breakout for GBP/USD over the past three weeks remains intact.

Higher lows have been seen since the end of April, with dips to $1.30 and then $1.308 finding buyers. As a result, we have seen an uptrend form. A fresh higher high requires a move above $1.318. The bullish view remains in place until the price falls back below $1.30.

USD/JPY slumps to six-week low

Dovish Federal Reserve (Fed) commentary and the US President Donald Trump trade tweets piled the pressure on USD/JPY over the past few days, with the price dropping to a six week low.

A rebound followed, but the price failed to push on above ¥111.00. Further gains would need to clear this area and then move on to recover ¥111.60. Additional declines target ¥110.40 and then down to ¥109.90.

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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