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

The dollar appears to be on the wane against European currencies, with EUR/USD and GBP/USD both rising sharply yesterday. However, a shift out of the Yen has brought about a rally in USD/JPY, despite initial losses sparked by the weekend’s Doha meeting.

Pound coin and dollar note
Source: Bloomberg

EUR/USD back up to key resistance
The pair has rallied back up to the 1.1334 resistance level, following continued gains to start this week. The medium-term picture has remained bullish and now the short-term picture is too. However, this major resistance level needs to be taken out first.

Given that this 1.1334 level represents not only a reliable recent support level, but also the location of the 50 and 100 day simple moving average (SMA) resting on it, there will likely be some indecision around here.

However, further gains seem likely, with a closed hourly below 1.1300 negating the short-term picture. A closed hourly candle below 1.1059 would negate the bullish medium term picture.

Will GBP/USD trendline break spark further gains?
Yesterday saw IN_GBPUSD break through a potential trendline resistance, in a move which called into account the clear topping pattern that has been forming since mid-March.

However, the key here is the ability to break through 1.4348 to truly negate that bearish view. Until then, we are still seeing lower highs on the major swing highs. However, with the lows clearly rising, we are certainly at a major inflection point, where a bullish view would come with a break through 1.4348 and a bearish view coming with a break and hourly close back below 1.4131.

USD/JPY trending higher after major sell-off
The pair has been busy regaining ground over the past 24-hours, following the sharp sell-off at yesterday’s open. Initial losses earlier today failed to break below 108.73, which would be needed to resume the bearish medium-term view.

Until then, further upside seems the likeliest option to follow on from the risk-on sentiment across other markets. Key resistance levels of note are 109.50 and 109.94. Alternately, a closed hourly candle below 108.73 would look back towards 108.44 and 107.63 for key support.

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