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

The rallies in EUR/USD and GBP/USD go on unchallenged, but USD/JPY may be on the point of turning higher. 

Japanese yen
Source: Bloomberg

EUR/USD keeps on rallying

The steady rally goes on for EUR/USD, with the next level to watch being the bottom end of the gap down in late December 2014.

Yesterday saw support emerge at the 50-hour simple moving average (SMA) at $1.18, continuing the sequence of higher lows. Monday’s high of $1.1847 has yet to be taken out, but this seems just a matter of time. Dips towards the 50-hour and 100-hour SMAs tend to produce buying opportunities, so this is the eventuality to watch out for.

GBP/USD on course to reach the September 2016 high

Consolidation over the past two days has carried GBP/USD back to the $1.32 area, where buyers are now stepping in.

A push above $1.3240 will clear the highs of the week so far, and leave the pair still on target to hit the September 2016 high at $1.3427. We need to see a daily close back below $1.3050 to become more bearish on the outlook here.

USD/JPY with the potential for a return to ¥111.55 on the cards

Dollar bulls defended the ¥110 level yesterday at USD/JPY, with the potential for a return to ¥111.55 now increasing. However, the price would need to clear ¥114.37 to really suggest that the steady downtrend of the year so far has run its course.

A drop back below Tuesday’s low of ¥109.92 would clear the way to a test of the ¥109 area.

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