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

A mixed bag for the dollar since Friday’s NFP number sees sterling rally, the yen fall and the euro consolidate.

Euro and dollar notes
Source: Bloomberg

EUR/USD continues to consolidate post-NFP
The pair continues to trade in a relatively hesitant manner, following on from Friday’s sharp rally. Yesterday saw both a new high and low created, casting a degree of uncertainty around the next direction.

Given the trend coming into this pattern, another move higher seems the most likely eventuality, with a bullish view in place unless we see a closed hourly candle below $1.1326. Key resistance levels to watch out for are $1.1374, $1.1393 and $1.1415. Conversely, notable support levels would be found at $1.1326 and $1.1295

GBP/USD spikes through resistance
The pair saw a huge spike overnight, in what has been described as a probable ‘fat finger’ trade. It is interesting to note the pair was gaining in the lead up to this spike anyway and given the fact the market was turning higher from the crucial $1.4333 area, a decent bounce was the preferred play anyway.

For now, it makes sense to allow this market to settle somewhat, yet a bullish outlook remains with a move above the key $1.4582 resistance level required to confirm this was indeed a bottom. As such, it seems prudent to buy on retracements unless we see an hourly close below $1.4333.

USD/JPY respecting Fibonacci on pullback
The pair has been moving higher since the major NFP-driven sell-off on Friday. This looks more like a retracement of that move rather than anything else, and as such, another move lower appears to be around the corner.

With that in mind, the Fibonacci resistance levels of ¥108.04 and ¥108.41 are of particular interest. Looking at the shorter-term trend, we are clearly moving in a consistent manner to the upside, with the Fibonacci pullbacks being respected well.

That said, a bullish short-term view is in play unless we see an hourly close below ¥107.22. Should that occur, a move back down to ¥106.86 and ¥106.43 would seem likely.

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