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

The dollar rally comes under pressure, with EUR/USD and AUD/USD both pushing higher. However, is this a reversal or simply a breather?

Euros and dollars
Source: Bloomberg

EUR/USD falling after brief rally

EUR/USD rallied through trendline resistance yesterday, pushing into the $1.1061 level and subsequently turning lower. There is a possibility that we are seeing a precursor to a more protracted bounce, with the creation of a new higher low followed by an hourly close above $1.1061 providing a bullish short-term view.

Until then, it seems likely we will see further downside, with an hourly close below $1.0985 providing a strong bearish signal that the trend is set to continue.

USD/JPY pushing back towards key resistance

IN_USDJPY is pushing back towards the notable ¥104.32 resistance level this morning, with the pair in the process of breaking out of its 2016 downtrend.

The ability to break convincingly above this area of resistance could set us up for a strong end to the year. As such, be aware of how the pair responds around this area, given that it can provide a directional bias for the longer term.

An hourly close above ¥104.63 would provide the bullish signal that a breakout has occurred. Conversely, a break back below ¥103.33 would provide a bearish reversal signal.

AUD/USD reversal in play

AUD/USD bounced from both trendline and Fibonacci (76.4%) support yesterday, with the pair subsequently rallying through the key $0.7593 swing high.

This provides the required signal that we have seen a bottom as such and a bullish outlook is now in play. Ideally we would see a retracement from here, providing us with a cheaper entry. However, a bullish view is in play unless we see an hourly close below $0.7505. 

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