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

It looks like we are in for a week focused on the dollar, as the market suddenly wakes up to the impact of Fed speeches. 

Euro and dollar notes
Source: Bloomberg

GBP/USD could see downward move

The dollar currently carries all before it, so we could expect to see further weakness in the pair.

The 50-hour simple moving average ($1.3301) has so far prevented rallies over the past two days from gaining momentum. So while it is rallying now, a drop through Friday’s low at $1.3250 could see a swift move down towards $1.3050, since there is little support available at present between these two levels. 

GBP/USD daily chart

EUR/USD tries to regain lost ground

Friday’s sell-off caught the euro too, but since hitting $1.12, the pair has climbed doggedly higher. A failure to push on from here could indicate a new lower high off the pre-European Central Bank peak, so the pair needs to push on through $1.1280 and then close above $1.13. A dip could see support at $1.12, Friday’s low, but a close below here opens the way to the 5/6 September lows around $1.1140. 

 

EUR/USD chart

USD/JPY puts bears in charge

Despite the bounce on Thursday and Friday, the pair has remained below the downtrend line for the year. A further decline today through Friday’s support of ¥102 would indicate the sellers are still in charge, with ¥100 being the next big target.

A bounce through Friday’s high at ¥103 would suggest gains in the direction of ¥104, and indicate the ongoing decline here has run its course. 

USD/JPY chart

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