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.
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