FX snapshot – EUR/USD, GBP/USD, USD/JPY, USD/CAD

US dollar strength remains in play as we lead into the FOMC announcement.

Pound dollar
Source: Bloomberg

EUR/USD selloff to continue

EUR/USD sold off heavily yesterday, falling below both trendline and $1.0945 support.

While price has been grinding higher overnight, this seems unlikely to continue and as such, we expect further downside.

A move through $1.0931 should provide the spark to lead a selloff, with support levels of $1.0904, $1.0897 and $1.0833 in view. Until that happens, a continued grind higher would be likely.

EUR/USD

GBP/USD downside expected

Yesterday’s selloff in GBP/USD looks likely to continue today, with price gradually grinding higher to set itself up for further downside.

The key signal for this next downside leg would be a move below $1.5030, which would then look towards support levels of $1.5000 and $1.4951.

Conversely, this bearish view would be negated should price break back above $1.5067.

GBP/USD

USD/JPY hits H&S projection

USD/JPY has rallied heavily since breaking through both a head and shoulders neckline, along with the ¥121.18 swing high. The projection of that pattern was around ¥122.00, which has subsequently been hit.

However, for this rally to continue, we will need to see the pair break through ¥122.23 resistance, which would point towards resistance levels of ¥122.30, ¥122.50 and ¥123.00 as the next major levels of note.

Bear in mind that ¥122.30 was the level which held up price over the space of a month.

Given that we are at a notable resistance level, a move lower seems feasible, which would continue the lower highs on the longer term charts.

The reversal signal to look out for would be a closed hourly candle below ¥121.80 or for more confidence, a close below ¥121.60.

USD/JPY

USD/CAD attempting triangle breakout

USD/CAD is attempting to break higher from a symmetrical triangle this morning, as the pair seeks to continue the strong uptrend we have seen over the past two months.

This breakout could provide us with a nice bit of directional volatility and thus it is worth watching out for.

The bullish signal would be a break through trendline resistance and closed hourly candle above C$1.3766, while a bearish breakout would come with a move through trendline support and closed hourly candle below C$1.3693.

Support levels of note are C$1.3693, C$1.3673 and C$1.3622. Resistance levels of note are C$1.3766, C$1.3761 and C$1.4000.

USD/CAD

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