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

The dollar has continued its ascent, with EUR/USD and GBP/USD moving lower, and USD/JPY gaining ground.

EUR/USD breaks Fibonacci support amid decline

EUR/USD has been consistently falling over the past month, with the price hitting a new five-month low this morning. The break below the wider 76.4% retracement at $1.1790 provides us with a bearish signal, and points towards a heightened chance that we will break below the crucial long-term swing low of $1.1554.

With such a break, we could be looking at confirmation that a long-term bearish reversal is in play. There is a possibility we could see the price turn higher soon enough for a short-term retracement. However, as long as we remain below the upper Bollinger band, there is a strong chance we will see further downside come into play.

GBP/USD breaking lower from consolidation  

GBP/USD is attempting to break lower after a period of consolidation, with the pair following through on the long-term double top formation that was completed three weeks ago. The lower lows that have been in play over the past two weeks could stifle this breakdown, but with trendline support now broken there is a strong chance we will follow through.

The hourly close below the bottom Bollinger band also furthers this bearish view. To the downside, watch the 76.4% Fibonacci support at $1.3355. Meanwhile, the bearish outlook is negated with a break above $1.3570, given that this would raise the likeliness of a continuation of recent consolidation.

USD/JPY continues to trend higher

USD/JPY has continued its ascent, with the price hitting a new four-month high. The pair has been relatively consistent of late, and this is unlikely to let up, with any pullback deemed as a retracement unless the price falls below ¥110.61.

With the price having pushed into the upper Bollinger band, there is a strong chance we will see a retracement from here. However, as long as we continue to create higher highs and higher lows, pullbacks are seen as buying opportunities. 

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