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

EUR/USD is trading just below key resistance, as GBP/USD rebounds from key support. Meanwhile, USD/JPY attempts to build on long-term breakout.

Euro and pound
Source: Bloomberg

EUR/USD hesitates below crucial trendline resistance

EUR/USD is gradually drifting lower from trendline resistance once again this morning, as we wait for the answer to whether this long-term resistance will be broken.

Given the shallow slant to this weakness, it points towards a good possibility of breaking higher. A break through $1.1450 (bullish) or below $1.1312 (bearish) will determine our view from here.

GBP/USD rebounding from trendline

GBP/USD is once more attempting to break higher from trendline support, following a consolidation at the beginning of the week. A break through $1.2908 would point towards a potential move back into trendline resistance.

Ultimately, this whole move lower is expected to be a retracement of the rally from $1.2588 and as such a bullish view is expected to come back into play at some point. For now, we would need a break through $1.2984 to bring back the bullish outlook. Until then, there is a good chance a rally back into trendline resistance could be sold into once more. 

USD/JPY breaks to four-month high

USD/JPY has managed to break through the ¥114.37 resistance this morning, pushing the pair into a four-month high. The break through ¥114.37 points towards a wider recovery for the pair. However, for now the question is whether today’s breakout will be sustained and built upon. We are seeing the price come back into support, and thus it makes sense to see if we can mount another leg higher to lessen the likelihood of a fakeout.

On the flipside, a break back below ¥113.99 would provide a bearish signal.

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