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

USD/JPY and EUR/USD consolidate following strong devaluation of the dollar. Conversely, GBP/USD continues to fall as sterling continues to suffer.

Euro and dollar notes
Source: Bloomberg

Will EUR/USD fall from consolidation?
The pair has been consolidating over the early part of April, following on from a sharp appreciation in late March. There is a clear uptrend in play since the December low, yet it has typically been a trend with wide swings in both directions.

With that in mind, there seems to be a good chance we could see some of those late March gains taken back in the coming days. The key will be whether we see an hourly close below 1.1335, which would provide a bearish view for the short-term, where Fibonacci levels of 1.1291 (50%), 1.1257 (61.8%) and 1.1214 (76.4%) would be the support levels to watch.

However, it is worth remembering that we are clearly trending upwards over recent months and thus a failure to break below 1.1335 would hint at further upside. Resistance levels of note are 1.1438 and 1.1495.

EUR/USD chart

GBP/USD falls from resistance
The pair continues to create lower-highs and lows since topping out at 1.4459 in late March. Overnight gains have been capped at Friday’s low of 1.4170 and we seem likely to see another leg-lower in the near-term. The key bearish indicator would be a closed hourly candle below 1.4122, which would then look towards the key 1.4057 support level.

Alternately, a failure to break below 1.4122 would highlight the potential for a deeper retracement of the leg-down from 1.4317, where a closed hourly candle above 1.4170 would signify the likeliness of a move back towards 1.4333 and 1.425 resistance levels. 

GBP/USD chart

USD/JPY consolidates following support break
The pair broke through a crucial support level yesterday, creating a 17-month low. The key to further losses will be the ability to maintain below the 110.66 level. Should that not occur, the bearish view still remains unless we see a break back above 112.60.

However, a break back above 110.66 would mean that we are not necessarily going to see a straight and simple breakout as many would be hoping would occur. A close back above 110.59 would look towards 111.31 and 111.64 resistance levels.

Alternately, while price remains below 110.66, we will be looking out for a possible strong breakdown, with 109.95 and ultimately 107.00 the support levels of note.

USD/JPY chart

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