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

Dollar weakness pushes EUR/USD higher and USD/CAD lower, while USD/JPY continues to consolidate at a crucial area of resistance.

Euro and US dollar notes
Source: Bloomberg

EUR/USD rallies, yet downtrend remain

EUR/USD is gaining ground this morning, as part of a wider dollar sell-off. However, as mentioned yesterday, any rally is seen as an opportunity to get short at a better price, as long as price does not break back above $1.1059.

As such, a bearish view remains in play for another break lower unless we push above $1.1059. Key support levels to watch come in $1.0964, $1.0952 and $1.0911.

USD/JPY consolidates ahead of key break

IN_USDJPY is bouncing from trendline support this morning, with price refusing to move away from the crucial ¥104.32 resistance level. We are seeing a symmetrical triangle pattern in play, highlighting the indecision at these levels.

Essentially, we await either a convincing break higher to provide a medium-term bullish outlook. Otherwise, a break back below ¥103.35 would bring a more bearish short-term outlook.

USD/CAD tumbles into key support area

USD/CAD sold-off sharply overnight, following a rally into the 100-period simple moving average (four-hour). This weakness is expected to continue for a move into the C$1.30, which is the approximate double top projection target.

However, with price approaching the key C$1.3047-C$1.3064 support zone, it seems likely we will see some form of bounce beforehand. As such, a bearish view remains in play, with any rally seen as a temporary retracement before we move lower once more.

This bearish outlook remains unless we see price break back above C$1.3183.

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