FX levels to watch: EUR/USD, GBP/USD and USD/JPY
Dollar strength remains the name of the game, with EUR/USD and GBP/USD weakness expected to be joined by a rally in USD/JPY.
EUR/USD falling back once again
EUR/USD is continuing its bearish surge, with the pair turning lower yet again after a brief bounce yesterday.
The break below the $1.1290-$1.1301 support zone points towards further downside to come, and with this latest turn lower it looks like we are not going to wait around for it to happen. As such, further downside looks likely from here, with continued creation of lower highs key to maintaining this downtrend. A break through $1.1342 would be required to bring about a more bullish short-term outlook.
GBP/USD looking likely to turn lower once more
A similar story for GBP/USD has seen the pair break into a new one-month low this week, with the price consolidating overnight.
This looks like a precursor to further downside, with a bearish view in play unless we see a break up through the $1.2959 resistance level.
USD/JPY expected to turn higher from here
USD/JPY has been drifting lower, with the pair moving towards the 61.8% Fibonacci retracement at ¥110.16.
The uptrend in play over the past month looks likely to persist, with this recent pullback providing us with a good buying opportunity. As such, further downside shouldn’t necessarily be something to worry about unless we break below ¥109.56. A bullish outlook remains in place unless that level is broken.
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