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

A mixed picture puts a bullish EUR/USD and bearish USD/JPY against a potential pullback for GBP/USD.

Euro and pound
Source: Bloomberg

EUR/USD likely to turn higher despite early weakness

EUR/USD has been weakening into the open today. However, given the break through the $1.1456 level on Friday, it seems likely we will soon head back through last week’s high of $1.1489 soon enough.

With that in mind, the current pullback is perceived as a retracement before we move higher once more. Only a break back below $1.1370 would negate this view. Watch out for trendline support as a potential area for bulls to come in. Otherwise the Fibonacci retracements come into play below there.

GBP/USD drifting lower after sharp rally

GBP/USD broke sharply higher on Friday following a retracement earlier this month. The daily chart below highlights the trendline resistance up ahead, which brings about an increased chance of weakness from here.

As such, watch out for a potential pullback from here as we remain within a rising wedge pattern.

USD/JPY hits trendline support

USD/JPY sold off sharply last week, with the price hitting a long term inside trendline on Friday. This is certainly a near-term challenge, which if surpassed would point towards a move into the ¥1.1099 region.

For guidance on the next move, watch out for a break below trendline support or above ¥113.57 (bullish). Bear in mind that although we could be looking at a possible move lower through trendline support, the medium to long-term view remains bullish thus longs would be considered if we moved into the ¥110.50-¥110.16 region.

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