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

With clear countertrend moves in play for GBP/USD and USD/CAD this morning, the FX markets look ripe for trend traders to get involved at preferential levels.

Euro
Source: Bloomberg

EUR/USD fails to retake highs

EUR/USD is turning lower this morning, following on from a failed bid to rally up towards $1.1218. The lower high created this morning provided a bearish signal and we are selling off in response. As such, further downside seems likely, with $1.1086 the next support level of note.

Ultimately, the $1.1059 level is the most important as this capped any upside over the month prior to last week’s breakout. Thus should this downside persist, we would be looking towards $1.1086 and $1.1059 as important levels to cap any negative move.

A more bullish view would come back into play with a break and closed hourly candle through $1.1193.

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GBP/USD uptrend persists

GBP/USD continued to trend higher on Friday, continuing the remarkably consistent trend of late.

This morning is seeing another retracement lower, yet given the trend, a bullish mentality remains unless we see an hourly close below $1.4250.

The four-hour chart highlights the trend very clearly and with the pair respecting the Fibonacci retracements very well in the past, we can look to $1.4346, $1.4324 and $1.4298 as possible support levels to spark the next move back to $1.4437.

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USD/JPY pulls back within recovery

USD/JPY has been recovering over the past three trading days, following on from the rejection of ¥112.16 support. With the creation of a new intraday high this morning, any pullback is deemed a retracement, rather than a top.

Thus a bullish view is in play unless we see a closed hourly candle below ¥113.34, where ¥114.00 and ¥114.27 represent the next resistance levels of note.

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USD/CAD rally unlikely to last

USD/CAD is moving higher this morning, within a very clearly defined downtrend. On the whole, beside the rally last Tuesday, we have seen the pair continue to create lower highs and lower lows.

As such, we expect that trend to continue, with another move back below C$1.3168. This bearish view would be negated with an hourly close above C$1.3314.

Interestingly, we currently coming into both the 50-hour simple moving average and 76.4% retracement. Given the depth of this retracement so far, the pair seems likely to turn lower once more in the near-term.

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