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

Early dollar strength has provided counter-trend moves this morning. However, with clearly defined trends in place, this could provide a reversal opportunity.

EUR/USD moving lower in retracement mode

EUR/USD is continuing its descent, following a brief foray above $1.2538 last week.

The current move lower looks likely to continue in the short term, but unless we break below the $1.2205 mark, there is a strong chance we are seeing a retracement. As such, watch out for the Fibonacci levels as potential bullish entry areas.

GBP/USD retracement unlikely to last

GBP/USD is also moving lower, coming off the back of the rally up through $1.4067 last week.

That break points towards an impending resurgence for the pair, with the current move lower simply providing a more advantageous buying opportunity. As long as the price does not fall below $1.3800, a bullish outlook remains in play.

USD/JPY approaching bullish break

USD/JPY has begun trading within the upper half of the Bollinger band, with the 20-hour simple moving average (SMA) providing support rather than resistance.

This is the first time we have seen the pair exhibit this in almost two weeks, providing a potentially bullish short-term view. However, we still remain below the crucial ¥106.86 swing low, so we need a break above that level to confirm the bullish view. But, until that happens, there is still a good chance of the pair turning lower soon enough. 

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