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CFDs are leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your deposits, so please ensure that you fully understand the risks involved. CFDs are leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your deposits, so please ensure that you fully understand the risks involved.

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

The dollar is surging amid a flight to safety given the economic demise of Turkey. 

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EUR/USD breakdown extends, as traders flock to USD

EUR/USD has extended lower following the clear bearish break that came with a move below $1.1574 last week.

That fall out of a consolidation phase led to a move in the direction of the wider bearish trend. Further downside looks likely, with any rebound likely to provide a selling opportunity. We would need a break above $1.1628 to provide a signal that this sell-off could be over.

EUR/USD chart

GBP/USD continues to decline within downtrend

GBP/USD has continued its downtrend, with the creation of lower highs and lower lows providing a clear clue that the short-term trend is expected to persist.

That means a break above $1.2909 would be required to point towards a stronger rebound. However, that would be perceived as a signal of a retracement of the near-term decline from $1.3214, rather than a wider reversal signal.

GBP/USD chart

USD/CAD rallies higher from wedge formation

USD/CAD has managed to extend its wedge breakout, with the initial break providing us with a nice 76.4% retracement before extending higher.

We have not seen the price move into the 61.8% retracement of the $1.3290-$1.2962 decline. Watch for how we respond to this level as a gauge of whether we are going to take a breather here or not. Should the price respect those levels, it would also give us a better idea of whether this a retracement or in fact a reversal of the wider move (bullish).

USD/CAD chart

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