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CFDs are complex financial instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money. CFDs are complex financial instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.

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

US dollar strength yesterday appears to be receding, leading to the possibility of further downside for USD/JPY. 

EUR/USD notes
Source: Bloomberg

EUR/USD – rally extension towards $1.12?

EUR/USD retracement ran for most of Thursday’s session, but once again buyers came in to defend the $1.1080 level, as they did a day earlier.

The bounce off this level continues to suggest an extension of the rally, towards $1.12 and higher, but it needs to clear the $1.1180 high from Tuesday/Wednesday, to avoid creating a lower high. A drop through $1.1080 would be a bearish development, but the loss of $1.10 would be the real bearish catalyst.

EUR/USD chart

GBP/USD support still lies at $1.2850

It was a volatile day for GBP/USD yesterday, as it spiked up to $1.3040 before slumping towards $1.29. Nonetheless, with a recovery back above $1.2980 it looks like the buyers are in charge again.

They still need a push above $1.30 to clear the way to fresh monthly highs in the direction of $1.34. As earlier in the week, support still lies at $1.2850. 

GBP/USD chart

USD/JPY tests resistance at ¥111.68

USD/JPY dropped down towards support at ¥110, before bouncing back to test resistance (previous key support) at ¥111.68.

If this is not broken, then it looks like the sellers are in control, and we would look for another push to ¥110. But if this is broken, then on towards ¥108. 

USD/JPY chart

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