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

Dollar weakness is driving some pairs higher, while USD/JPY falls back below key support.

Euro and dollar notes
Source: Bloomberg

GBP/USD eyes $1.24

A steady push higher over the past few days may be safely attributed more to US dollar weakness rather than sterling strength.

Over the last three weeks $1.23 has been the high-water mark for the pair, making the top end of a range bounded by $1.21 on the downside.

Even if the price breaks higher from here, it still needs to clear the $1.24 area to break the longer-term downtrend. 

GBP/USD

EUR/USD could see 200-day SMA

The pair has covered a lot of ground over the past two weeks, but remains in a downtrend from the August highs. A move above $1.12 would be needed to break this.

If the pair falters here, or just below it, it could hand the initiative to the bears. We should be watching the $1.1178 area - the 200-day simple moving average (SMA) - very closely. 

EUR/USD

USD/JPY rally needs to clear ¥104.32

Hopes of a breakout have been dashed here, as the price drops back below ¥104. A continuation of this move could see the 50-day SMA at ¥102.79 tested, although the 2016 downtrend is still in abeyance unless we get a firm close below ¥99.64.

A rally needs to clear ¥104.32 and then push on above ¥105.50 for the pair.

USD/JPY

AUD/USD bulls eye break above $0.7740

Despite finishing off the lows yesterday the pair has held up well so far this morning. However, we still find ourselves stuck between the rising trendline for the year and the descending trendline off the April highs.

We need to see a break above $0.7740 to really show that the bulls have the upper hand, but unless the sellers push the price below $0.75 the picture arguably still favours the bulls in the longer term. 

AUD/USD

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