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

Further upside looks likely for GBP/USD, as well as EUR/USD despite short-term downside. Meanwhile, with the price falling below key support, further downside seems probable for USD/JPY.

EUR/USD regains ground after recent decline

EUR/USD has managed to regain some ground this morning, following a strong move lower earlier in the week. The pair has respected the 61.8% retracement thus far, which highlights the potential to begin moving higher from here.

There is a strong chance that this recent downturn will be short term, with the wider bullish theme likely to return before long. Therefore, while we could see further temporary downside, the likeliness is that the bullish theme will return soon enough. With that in mind, look at the 61.8% and 76.4% Fibonacci retracements as potential bullish reversal points. This view remains in place unless the price falls below $1.1817.

GBP/USD trading near crucial support level

GBP/USD has been moving gradually lower this week, with the failure to push through $1.3613 potentially paving the way for a bearish short-term break.

Should the price fall back below $1.3495, then this would provide a bearish immediate view, with Fibonacci levels pointing towards a possible fall towards $1.3420 or $1.3375. That being said, much like EUR/USD, such short-term downside is likely to be a precursor to further upside, given the wider uptrend. 

USD/JPY breaks notable support

USD/JPY has broken below the key ¥112.05 support level this morning, providing a bearish signal for the pair following the recent creation of lower highs and respect of the 76.4% level.

This likely sets us up for further downside, with the next notable support levels coming in around ¥111.65, and ¥110.84.

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