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

Fed minutes prompted a reversal in the dollar, which has interesting implications across the FX space. 

USD/JPY notes
Source: Bloomberg

GBP/USD lifted by the FOMC minutes

The services PMI number and dollar weakness after the Federal Open Market Committee (FOMC) minutes helped to push GBP/USD back to $1.25.

However, the price now needs to push through the descending hourly trendline off the highs from late March, which would imply a move back above $1.2520. Areas of short-term support are $1.2450 and then $1.2420, with the former a potential mark to watch for a bounce, given the rising trendline that comes into play from the 14 March low. 

EUR/USD getting ready to go up

A staunch defence of the $1.0635 level and renewed USD weakness lends credence to the idea that the euro is poised for a move higher.

A break above the $1.07 high from 31 March clears the way to $1.0750 and then $1.0780. On the daily chart, EUR/USD now needs to clear the 200-day simple moving average (SMA) at $1.0863, and then move on through the late March high of $1.09.

USD/JPY looking bearish  

Further losses look likely for USD/JPY, after a reversal yesterday that left the pair close to key support at ¥110.11. Below this is the 200-day SMA (¥108.54), while downside targets from there would be ¥107.45 and then ¥105.53.

For now the pair is oversold intraday, so a bounce is possible, but as long as it remains below ¥111.50, the bearish outlook is preserved. A close above ¥111.50 would be needed to reverse the expectation of further losses.

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