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

Sterling remains under pressure ahead of the Autumn Statement, while USD/JPY has entered a consolidation phase.

Sterling and dollar notes
Source: Bloomberg

GBP/USD may challenge Friday’s lows

Today’s Autumn Statement offers the potential for volatility, even if the actual substance is likely to be thin on the ground. We have seen early weakness in GBP/USD, with the possibility that the price moves back to the Friday low of $1.2320.

A move below here still targets $1.21. The price must clear the 50-day simple moving average (SMA) - currently $1.2535 - to begin a fresh upward move. 

EUR/GBP may be dictated by sterling weakness

With the euro still struggling, it looks like the direction EUR/GBP will be provided by sterling weakness.

It seems a bottom has been established at £0.8500, so a continued push should head towards the Monday peak at £0.8639, and then on to £0.87.

A drop below £0.85 would head to £0.8256. 

USD/JPY in a phase of consolidation

It still looks like USD/JPY has entered a consolidation period. With the price still heavily overbought and no sign of a move through ¥111.50 in sight the next big move could be lower.

We would look for a retracement to ¥110 and then ¥109, while a break higher would head towards the ¥114 area.

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