GBP/USD showing signs of a resurgence
The downtrend in GBP/USD is showing signs of abating, with price having gained ground after coming into contact with the April 2015 low of $1.4566 and long-term ascending trendline support.
We have not yet seen the necessary signs that a bullish view should be taken but certainly we are open-minded regarding a potential rally.
The key here is an hourly close back above $1.4645, which would provide the bullish signal for a strong end to the week. Until that happens, the view is now neutral unless we see a convincing close below $1.4566 or above $1.4645.
Resistance levels of note are $1.4645, $1.4663 and $1.4693, with support levels at $1.4566, $1.4230 and $1.3504.
EUR/GBP reaches crucial resistance level
EUR/GBP has sold off from a critical resistance level overnight, following on from a major rally to start off 2016.
The £0.7483-£0.7500 zone represents the top of the past two rallies in 2015 and thus this marks the perfect place for a bearish reversal. So far, we have seen part of a reversal pattern, with confirmation coming with a closed hourly candle below £0.7425.
Should this occur, a bearish bias would become active, with support levels of £0.7416, £0.7408 and £0.7389 in view.
Without a move back below £0.7425, we would need a convincing close back above £0.7500 to regain the bullish view.
USD/JPY seemingly on the turn
USD/JPY has rallied heavily overnight, with price breaking through an intraday double-bottom neckline at ¥118.25.
We are currently seeing the 50-hour simple moving average providing support, with a likely break higher seemingly on the cards. However, a close back above ¥118.70 would be needed for greater confidence of a bullish reversal given the strength of previous support and resistance around this level.
As such, we have seen the infancy of a bullish reversal, yet confirmation is still required. Resistance levels of note at ¥118.70, ¥118.79 and ¥119.50. Support levels of note are ¥118.06, ¥117.66 and ¥117.32.