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

While the euro and sterling sail higher, the yen has taken a battering, with a rebound in USD/JPY at hand. 

Euro and dollar notes
Source: Bloomberg

EUR/USD recovering

The recovery goes on for EUR/USD, with the rising trendline from the beginning of the year still intact. The price showed some hesitancy around $1.0675 yesterday, which suggests that this is the area that bulls will need to break in order to maintain upward momentum. A push above here would then target $1.0727 and $1.0777.

Bears will be disappointed unless they can push the price to $1.06 and below, a loss of this would put the price below the rising trendline and suggest an initial move to support at $1.0561.

GBP/USD looks unstoppable for now

There seems little stopping sterling at present, with the price testing the area around $1.26, which it tried to break yesterday but failed. A close above $1.2611 would target $1.26 and then $1.2775.

For the moment dollar weakness is driving this – a relatively empty calendar for sterling means that we could see a falling dollar drive GBP/USD even higher. Short-term, a close below $1.2560 would be needed to start creating a new lower low, but there looks to be a strong zone of support around $1.25.

USD/JPY to rebound?

A bounce off the 200-day simple moving average (SMA) at ¥108.84 seems to offer the possibility of a rebound for USD/JPY towards ¥110, or perhaps ¥111.

As long as it holds below ¥111.68, the sequence of lower highs is intact. A proven stumbling block remains ¥109.50, so a break above here opens the way to ¥110 and higher. Bears will need to break ¥108 to create a new lower low, and below ¥107.45 would open the way to ¥105.60. 

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