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

Risk-off sentiment drives dollar weakness, as personified by EUR/USD strength and USD/JPY weakness. However, as we see those moves retraced, could we be setting up for the next big move?

CFDs are a leveraged product and can result in losses that exceed deposits. Trading CFDs may not be suitable for everyone, so please ensure you fully understand the risks and take care to manage your exposure.
Euro and dollar notes
Source: Bloomberg

EUR/USD bounces towards bullish view
Last week’s EUR/USD losses gave many the view that we were in the process of seeing a return of the bearish sentiment that was expected to push the pair to parity last year. However, as stressed, we remain within an uptrend here, and the inability to break below 1.1144 signals exactly that.

Current price-action is looking to create a new higher high, should we see a break through 1.1317. That would also confirm the higher low. Should that occur, we would be looking towards the crucial 1.1335 resistance level as next resistance.

GBP/USD within triangle pattern
The pair has sold-off heavily overnight, yet is regaining ground this morning. The pair is trending within a triangle formation, which points towards the potential for another bounce1.4242 resistance. However, the wider trend seems geared towards another move lower, with a break below 1.4090 signalling a likely move towards 1.4057, 1.4041 and 1.4005 support.

USD/JPY attempting to regain lost ground
Overnight losses for the IN_USDJPY pair comes amid a clear return to the bearish outlook driven by the break below 110.66 two weeks ago. Further losses seem likely and thus this bounce is seen as a retracement before another leg-lower.

Watch out for Fibonacci levels as potential resistance, with the 38.2% (108.20) currently being tested. The 50% (108.31), 61.8% (108.43) and 76.4% (108.57) are next in line.  

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