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

The rallies in EUR/USD and GBP/USD go on unchallenged, but USD/JPY may be on the point of turning higher. 

Japanese yen
Source: Bloomberg

EUR/USD keeps on rallying

The steady rally goes on for EUR/USD, with the next level to watch being the bottom end of the gap down in late December 2014.

Yesterday saw support emerge at the 50-hour simple moving average (SMA) at $1.18, continuing the sequence of higher lows. Monday’s high of $1.1847 has yet to be taken out, but this seems just a matter of time. Dips towards the 50-hour and 100-hour SMAs tend to produce buying opportunities, so this is the eventuality to watch out for.

EUR/USD price chart

GBP/USD on course to reach the September 2016 high

Consolidation over the past two days has carried GBP/USD back to the $1.32 area, where buyers are now stepping in.

A push above $1.3240 will clear the highs of the week so far, and leave the pair still on target to hit the September 2016 high at $1.3427. We need to see a daily close back below $1.3050 to become more bearish on the outlook here.

GBP/USD price chart

USD/JPY with the potential for a return to ¥111.55 on the cards

Dollar bulls defended the ¥110 level yesterday at USD/JPY, with the potential for a return to ¥111.55 now increasing. However, the price would need to clear ¥114.37 to really suggest that the steady downtrend of the year so far has run its course.

A drop back below Tuesday’s low of ¥109.92 would clear the way to a test of the ¥109 area.

USD/JPY price chart

The information on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG Bank S.A. accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it and as such is considered to be a marketing communication.