FX levels to watch: EUR/USD, GBP/USD and AUD/USD
The bulls have returned to GBP/USD, but the yen is on the back foot against the dollar after weaker Japanese PMI data.
EUR/USD back to key support zone
Dips into the $1.125-$1.13 zone continue to find buyers for EUR/USD, as we saw earlier this week.
This area of support continues to hold, but since the beginning of the year rallies have become increasingly short-lived. A descending triangle has formed over the past six months, and we would need to see a break above $1.147 to suggest that this formation has been broken. Alternately, a break below $1.126 would then target $1.1118.
GBP/USD finds more room to rally
Sterling continues to rally, and a move above yesterday’s $1.31 high would open the way to the January peak at $1.32 for GBP/USD.
Last week saw a higher low created, providing a more positive view for the pair. A move back below $1.295 would be the first step in creating a more bearish view.
USD/JPY in tightening range
The USD/JPY pair finds itself in a triangle formation, as rising support from Friday’s lows clashes with resistance from last Thursday’s highs.
We wait for a break either above ¥110.90 or below ¥110.70 to determine the next move.
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