FX levels to watch: EUR/USD, GBP/USD, USD/JPY, AUD/USD

Dollar weakness is the key story, as EUR/USD, GBP/USD and AUD/USD look bullish, while USD/JPY continues to sell off heavily.

GBP/USD forex pair
Source: Bloomberg

EUR/USD pennant points to gains
The EUR/USD rally that has been in place throughout February looks likely to continue apace today, despite the drift lower we have observed overnight. This looks a lot like a pennant pattern and thus another break higher seems likely before long.

The bullish signal for another leg higher would be a closed hourly candle back above the $1.1311 level. Should this occur, the next important resistance levels of note would be at $1.1338, $1.1387, $1.1460 and $1.1495. However, should this drift lower continue, support levels of $1.1252 and $1.162 would be worth watching out for.

GBP/USD returning to strength
The dollar weakness story continues in GBP/USD, which has seen some strength coming back into play yesterday following a few days of downside. The current move higher seems likely to break through yesterday’s peak at $1.4515 to then create another new high within this move.

Should that occur, it would provide greater confidence this move will last, with resistance levels of $1.4547, $1.4566 and $1.4668 the next in view. Alternately, a closed hourly candle back below $1.4445 would provide a worrying situation which could lead to further losses, with $1.4378, $1.4363 and $1.4351 the next to watch.

USD/JPY weakness expected to continue
USD/JPY has been selling off heavily over the past week, with the break through ¥116.21 representing a very bearish signal for the pair. The triangle pattern seen over the past 24 hours points towards further losses, with a closed hourly candle below ¥114.25 representing the bearish signal for another move lower. The next major support level of note is some way away, at ¥110.66.

Alternately, a closed hourly candle back above ¥115.26 would bring a likely short-term bounce towards ¥115.54, ¥115.84 and ¥116.21 resistance levels. 

AUD/USD tests key resistance level
AUD/USD is rallying into $0.7097 resistance this morning, where a break could spark a bout of buying for the Aussie. As such, this is a pivotal level to watch, where a closed hourly candle above $0.7097 would point towards further gains, with $0.7128 and $0.7141 the first key resistance levels. However, the inability to break through $0.7097 would look towards a return to $0.7088, $0.7069 and $0.7044.

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