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

GBP and JPY appear to be back on the front foot against the dollar, with gains expected for both currencies today. Meanwhile, EUR/USD continues to consolidate as we await the next move.

Euro notes
Source: Bloomberg

EUR/USD consolidation continues to dominate

It's a very similar situation to yesterday, where EUR/USD trades in a hesitant and sideways manner. Given the bullish entry to this pattern, a preference for a bullish exit is taken. However, until we see a breakout, this sideways chop is likely to persist.

With that in mind, an hourly close below $1.1326 would provide a more bearish view, with $1.1295 and $1.1250 the next key support levels. However, the most likely move seems to be an hourly close above $1.1393, which would point towards a move higher, with the subsequent resistance level of note at $1.1415. 

GBP/USD retracement unlikely to last

GBP/USD managed to break through the key $1.4582 level on its own merit yesterday, negating the supposed ‘fat finger’ trade which initially broke through resistance. This is a sign of strength and given that it comes following a move into a crucial support area, the bullish medium-term outlook is now once more being matched by a bullish short-term view.

Looking at the 30-minute chart, there is a clear swing low at $1.4493 which underpinned yesterday’s move higher. As such, while price remains above this level, a bullish bias is preferred, with 61.8% and 76.4% retracements of particular interest for longs. Should we see an hourly close below $1.5421, then this would provide a more bearish view, with $1.4473 the next key support level.

Fibonacci retracements dominate as USD/JPY turns lower

USD/JPY has been respecting Fibonacci retracements very well over the past two days, a trend which is continuing apace this morning. The pullback to the 76.4% retracement is now leading to yet another move lower, which coincides with the medium-term bearish view.

As such, a bearish view remains unless we see an hourly close above ¥107.45. Should that occur, we would be looking towards ¥107.90 as the next major resistance level. However, for now we are looking for a move into the ¥106.72 and ¥106.43 support levels. 

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