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

A bit of a mixed bag for the dollar sees it strengthen against the yen and sterling, while the euro continues to gain ground following yesterday’s ECB meeting. 

Source: Bloomberg

EUR/USD heading towards key resistance level

EUR/USD has been gaining ground following yesterday’s bounce from $1.0525, with the price now heading towards the absolutely crucial $1.0629-$1.0640 resistance zone.

The ability to break through that resistance area is key to understanding whether we are seeing a bottom, or just consolidation before further losses ensue. In the shorter-term, a break through yesterday’s high of $1.0615 is required to carry the short-term uptrend through.

GBP/USD continues to fall

GBP/USD has seen its downtrend continue this week, with the price falling into the 76.4% retracement. The second half of the week has been characterised by consolidation, with another leg lower certainly a strong possibility, given the shorter term trend.

That said, with the price having rallied through the 50-hour simple moving average (SMA), a break above the 100-day SMA and the swing high of $1.2214 would be an important sign that we could be moving into some strength for the pair. 

USD/JPY rally points to bullish reversal

USD/JPY has punched through the crucial ¥114.96 resistance level overnight, completing a bullish reversal pattern for the pair. This has implications for the medium-term fortunes of the pair, with continued strength likely to ensue.

A break below ¥113.56 would be required to negate this view. Until then, buying on dips makes sense.

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