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

Dollar weakness looks set to persist, with the euro, pound and yen all expected to gain against the greenback.

EUR/USD continues to build a base for potential recovery

Following a 76.4% retracement of the $1.2205-$1.2556 rally, EUR/USD is continuing to consolidate.

With a subsequent shorter-term intraday 76.4% retracement also coming into play, we are now seeing the price turn higher once more. The ability to break above $1.2353 will provide us with the clues of whether this bullish view will gain traction. An hourly close above that level would bring a bullish outlook, whereas a fall below $1.2281 would bring a more neutral/bearish view.

GBP/USD rallying towards trendline resistance

Coming off the back of a 76.4% retracement into trendline support, GBP/USD is pushing higher at the beginning of this week.

The current move higher is bringing us towards the trendline resistance dating back to mid-January. This triangle is expected to continue unless we see a breakout. Such a breakout would come with a rally through $1.4147 or below $1.3800.

USD/JPY falls into Fibonacci support

USD/JPY has been falling since the peak on Wednesday, with the pair dropping into the 61.8% Fibonacci support level.

Given the downtrend in play over recent months, there is a strong chance that we will continue to move lower rather than break higher. While we could see the price bounce from this Fibonacci level, a bearish outlook remains, unless we see a rally above ¥107.90. 

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.

Find articles by analysts