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

So far weakness persists in cable and Eurodollar, while USD/JPY has recovered most of yesterday’s losses.

Pound coins and dollar notes
Source: Bloomberg

GBP/USD may lack a market-driver

The pair dropped through $1.24 yesterday, but for now is holding above the key $1.2320 level. If this breaks then we would look towards $1.2178 and then $1.1980.

With little UK or US data in the next two days there may be little to drive the market in either direction. A rally needs to clear $1.2530 to then target the 100-day SMA at $1.2730.

EUR/USD on the verge of being oversold

EUR/USD slipped below $1.04 again during Monday’s session, but for now it is holding the post-Federal Reserve low above $1.0366. A break below here would head towards $1.0321, and then $1.0192.

There is still some way to go before hitting parity, so with the pair now almost oversold again we could see a short-term bounce that carries it back towards $1.05. 

USD/JPY boosted by BoJ

Yesterday’s weakness has been mostly erased within a few hours, after the Bank of Japan left policy unchanged at its latest meeting.

Now we look to see if the pair can push above the high from last week at ¥118.66, and then push on to ¥119.51 and higher.

Bears would need to push USD/JPY below the Monday low of ¥116.43 to increase the chances of a bigger pullback.

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