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

It looks like we are in for some euro weakness, while cable has recovered from election-related jitters. 

Euro notes
Source: Bloomberg

EUR/USD still in a downtrend

Greece worries exploded onto the scene over the weekend, causing a continuation of the short-term downtrend that began last week at $1.1250.

This series of lower highs and lower lows will be preserved unless EUR/USD can move back above $1.1190. If the price fails to make a new higher high, we look to see if it can move below the $1.1110 level. A drop below $1.1080 would likely be the signal for a deeper retracement to $1.10 itself. 

GBP/USD – buyers back in charge?

Last week’s swift drop to $1.2775, the previous key support in late April, seems to have ended. Further gains this morning are pushing GBP/USD back above $1.2846, the high set during Monday’s thin trading.

It looks like the buyers are back in charge, a view that would only be cancelled out with a daily close below $1.28. 

USD/JPY holding at the support zone from ¥110.11 to ¥110.80

The ranging nature of USD/JPY action looks to be resolving in favour of the bears, with a clear series of lower highs since last Wednesday. However, so far the price is being held up by the support zone from ¥110.11 to ¥110.80.

A clear break below here is needed to resolve the impasse, and would open the way to ¥108. A break higher needs a close above ¥112, which would indicate that a new push in the direction of ¥114.37 is underway.

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