FX levels to watch: EUR/USD, GBP/USD and USD/JPY
Dollar weakness is expected to come into play once again after recent volatility, with EUR/USD strength and USD/JPY weakness likely.
ECB sell-off fails to dampen bullish EUR/USD pathway
EUR/USD is rallying once again following a pullback in the wake of dovish commentary from European Central Bank (ECB) president Mario Draghi yesterday.
Draghi is relatively predictable in his ability to weaken the euro, yet this looks unlikely to last, with EUR/USD moving higher once again. With the price attempting to push through $1.1288 resistance, the ability to do so will be key in providing continued bullish sentiment for the pair.
GBP/USD fails to break out despite Article 50 extension
GBP/USD upside has been somewhat limited despite the deal agreed yesterday, which will see Article 50 extended until October. That lack of optimism could be to do with the fact that the EU insist this will be the only extension, raising the likeliness of a no-deal Brexit in six months.
Charting wise, we have seen the pair respect the $1.3123 resistance level once more yesterday, with a break through that level required to attempt a rally into the key $1.3196 level. Ultimately, we need to see a break through either $1.3196 or $1.2959 to provide a wider bullish or bearish signal for this pair.
USD/JPY expected to turn lower from here
USD/JPY has managed to rebound into the 200-day simple moving average (SMA) and 76.4% Fibonacci confluence overnight, with a bearish move expected to come into play from here.
The downtrend in place over the past week points towards further downside to come, with a rally through ¥111.28 required to negate this bearish outlook.
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