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

The dollar sell-off looks likely to continue, with EUR/USD hitting a three-year high, and USD/JPY breaking into a 15-month low. Meanwhile, EUR/GBP is showing signs of a bearish reversal after a rally into key resistance.

EUR/USD pulls back after rally into key resistance

Following another leg higher yesterday, EUR/USD is drifting lower, with the price having hit a three-year high with the temporary break above $1.2538.

The ability to break back above that level is going to be key to today’s trade. Alternately, a drop back below $1.2454 would bring a more bearish outlook.

EUR/GBP shows signs of potential bearish reversal

After a brief foray above the key £0.8910 resistance on Wednesday, EUR/GBP has finally started to turn around.

The £0.8857 level is going to be key to where we go from here, with an hourly close below it pointing towards a bearish head and shoulders completion. Conversely, a break above £0.8902 would signal a likely bullish push back through £0.8910.

USD/JPY continues to trade lower

The price has hit a 15-month low today, with USD/JPY continuing its descent.

There is a strong chance we will see a continuation of this move today, with the middle Bollinger band providing good selling opportunities. A break above ¥106.86 would negate this short-term bearish outlook. However, for the most part, a break above the upper Bollinger band would signal that something is shifting in sentiment.

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