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

NFP day dawns, promising plenty of excitement in FX markets.  

Pound sterling coin and dollar note
Source: Bloomberg

GBP/USD bears bitten by spike

Sterling bears will be licking their wounds today after yesterday’s spike. We have seen the price drift back from $1.33, which marked the limit of cable’s advance. A break through here would head towards $1.3370, the high from the beginning of August.

Any strength in the dollar following non-farm payrolls today could see some of the gains unwound, with initial support around the 50-hour simple moving average (SMA) at $1.3197, and then down to the lows of the week around $1.3050.

EUR/USD bounces into ceiling

The pair bounced yesterday and hit a ceiling at $1.12, providing, it seems, another selling opportunity.

Further downward progress would head towards the lows of the week around $1.1125, and through here the next target would be the early August low at $1.1069.

Any rally through the 200-hour SMA ($1.1225) might start to put a dent in the bearish outlook, with $1.13 as longer-term resistance.

USD/JPY tests 2016 downtrend

The 2016 downtrend is being tested once again, with IN_USDJPY trying to succeed where yesterday’s rally to ¥104 failed. If it does push through ¥104, then the next target would be ¥106.

So long as daily stochastics remain in a bullish trend, with the hourly moving averages all moving higher, then the instinct heading into next week will be to buy dips as they appear. 

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