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

EUR/USD gains ground, yet sellers are looking to come back in, with GBP/USD and USD/JPY both gaining ground.

Source: Bloomberg

EUR/USD expected to turn lower

EUR/USD has seen another brief move higher this morning, posting a shooting star candle on the four-hour chart. We have a very clear downtrend in place for the pair and despite a brief foray above trendline resistance, it is likely that this downtrend will continue apace soon enough.

Whether it is from the 50% ($1.1186), 61.8% ($1.1199) or 76.4% ($1.1216) remains to be seen, but a bearish view is in play unless we see an hourly close above $1.1243. Support levels of note are $1.1129, $1.1080 and $1.1059.

GBP/USD breaking higher once more

GBP/USD is attempting to break higher from an ascending triangle formation this morning, in a continuation of the strength we have seen over the past week. However, with the major $1.4770 resistance level in sight (May high), there is good reason to believe that any upside could hit the buffers around that area (if only temporarily).

With that in mind, a bullish view remains in play, yet the reaction to $1.4769 would be crucial to the short-term fortunes of the pair. Alternately, a closed hourly candle below $1.4693 would be a warning sign that we could be turning lower for a deeper retracement. 

USD/JPY falls from Fibonacci resistance

USD/JPY fell sharply overnight, following resistance at the 76.4% retracement yesterday. Overall we saw a 76.4% pullback, set within a wider 76.4% pullback. We are seeing a rally from a higher low this morning, bringing the potential for a symmetrical triangle formation.

This points towards both trendline and 76.4% resistance (¥110.24) as a possible area for the pair to turn lower once more. The medium-term view remains bearish, yet some will want to await a triangle break to confirm direction. An hourly close below ¥109.41 would look bearish, for a move down to ¥109.11 and ¥108.23.

Conversely, an hourly close above ¥110.45 would look bullish, with ¥110.60 the next resistance level of note.

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