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

After Friday’s payrolls volatility, the recent trends remain in play for EUR/USD, GBP/USD and USD/CAD, yet with the European Central Bank on Thursday, will the euro begin to weaken?

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US dollar
Source: Bloomberg

EUR/USD weakening ahead of ECB
This week will see everyone focus on Thursday’s ECB meeting and the expected easing around that.There is a good chance we will see the EUR/USD ease once more prior to that announcement.

However, for now, we remain within a clear uptrend and despite the pullback we are currently seeing, 1.0903 is the new support level that needs to be taken out for the uptrend to be negated.

Otherwise a failure to take Friday’s high of 1.1043 could precede another leg lower for a bearish view. Until that happens, the bullish view is tentatively intact, with the fundamental concerns growing with each passing day. Resistance levels of note are 1.0986, 1.1016 and 1.1043. Support levels are 1.0967, 1.0935 and 1.0903.

GBP/USD retracing within uptrend
GBP/USD is tumbling lower once more this morning, in what looks like another retracement in the rally which has characterized March so far. The Fibonacci retracements have been very consistent so far, and thus it is worth watching for 1.4162 (61.8%) and 1.4141 (76.4%) as possible support levels to spark another leg higher.

This bullish view will remain in play unless we see an hourly close below 1.4108.

USD/JPY to break higher once more
USD/JPY saw an upwards breakout from the symmetrical triangle last week, with price pushing through the 114.00 level and turning lower at the crucial 114.27 resistance level. The pullback has taken us back to trendline support and with the creation of various low volatility spinning top candles, it looks primed for a bullish break higher.

A confirmation signal would be an hourly close above 113.81 for a move back to 114.27 and on towards 114.55. A close candle below 113.50 would invalidate this bullish view.

USD/CAD turning lower from trendline
USD/CAD saw yet another big leg lower on Friday, setting a new 3-month low for the pair. With the stochastic oscillator heavily overbought and price seemingly turning lower from trendline resistance, there is a good chance of another leg lower today.

While there is a chance we could see a more protracted move higher, the bearish view would remain in play unless price breaks above 1.3473. If that deeper retracement did happen, watch 1.3371 and 1.3386 as key resistance levels. Support levels of note are 1.3314 and 1.3290.

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