FX Levels to watch – GBP/USD, EUR/USD, USD/CAD, USD/JPY

The ECB meeting day finds the euro understandably quiet, while USD/CAD seems poised to head lower.

Pound sterling coins and dollar note
Source: Bloomberg

GBP/USD lacks momentum
Like a number of assets cable has drifted for most of this week, with neither side able to muster much momentum. As a result, we continue to watch for a significant break in either direction for the pair.

So long as the price remains above the 200-hour simple moving average (SMA) ($1.41), then the instinct is to buy dips as they occur. The first target is a move to $1.4327 (the 50-day SMA), which would then leave the way clear to push on towards $1.44.

EUR/USD gives sellers the upper-hand
So much depends on what Mario Draghi does today, so volatility is a given here for the pair. However, the lower-high yesterday gives the sellers the upper-hand, if only marginally.

A break below $1.0950, key support on Monday and then also Wednesday, would head towards $1.09 and then the key $1.08 area that stemmed the downside throughout January. A rally would need to clear the 200-day SMA at $1.1045, the area where gains ran out of steam this week.

USD/CAD keeps sellers in control
The sharp drop yesterday took the pair through Monday’s lows, and despite some gentle moves higher overnight, the sellers are still in control.

The close below the 200-day SMA confirms that more losses look likely with a move all the way to C$1.3045 possible, and then down to the October 2015 lows around C$1.2832.

USD/JPY stalls upwards progress
Yesterday saw the pair move below ¥122.50, as it did on 29 February/1 March, but then buyers came back in, so this is clearly the level to watch for now on the downside. However, the hourly downtrend line off the 2 March and 4 March highs has kicked in again this morning, stalling upward progress.

First support is possible around ¥113.12, and a break below here will head towards ¥112.50, the low of yesterday. Bulls need a close above ¥114 to suggest there is more strength in this uptrend. 

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