FX levels to watch: EUR/USD, GBP/USD and USD/JPY
The Fed has put a lead weight on the US dollar, driving the greenback lower as it revises its policy outlook.
EUR/USD surges after FOMC
The weaker dollar lit a rocket underneath the euro yesterday, and we have seen the EUR/USD price push back above $1.15.
Further gains target $1.1554 and then $1.16 and the top end of the upward channel. The $1.14 area is key for possible support.
GBP/USD bounces off 200-day SMA
GBP/USD found support at the 200-day simple moving average (SMA) of $1.3056, and then began a new move higher.
Further gains target $1.32, the highs from the end of last week, and then $1.3338 and $1.3470 come into view from here. The bullish view remains, unless we see a break of $1.30 and the creation of a lower high.
USD/JPY takes a turn lower
The dollar’s drop yesterday further reinforces the impression that the USD/JPY is headed lower.
The price is oversold on an intraday basis, but any rebound may well provide a lower high in due course and a new selling opportunity. The ¥109.20 and then ¥109.60 levels are areas of possible resistance. Further declines head towards ¥108.40 and then ¥108.00.