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

USD strength is dominant across the board, torpedoing a rally in EUR/USD on the back of strong PMI figures. 

Pound coin
Source: Bloomberg

GBP/USD still weak

Weakness continues to be the order of the day in cable, with a rally yesterday towards the 200-hour simple moving average ($1.2480) meeting the same fate as others in the past month.

Now the bears need to get the price below the support zone formed around $1.2350/$1.24, with a move below here potentially opening the way to $1.2280. It would need a move above $1.25 to break the bearish tone, which seems unlikely at present.

EUR/USD belongs to the dollar for now  

The recovery in EUR/USD last week proved to be a flash in the pan. The price is now back in the downward trend that prevailed from the $1.08 peak at the end of January.

The low from last week lies around $1.0520. Today’s PMI numbers have been encouraging from an economic standpoint, but with dollar strength in the driving seat the currency remains under pressure. A drop below the February low opens the way to $1.0450 and $1.0370.

USD/JPY going strong

Talk of an earlier rate hike in the US has bolstered the dollar, with the price pushing back above ¥113.

Bulls will now be looking to target ¥114 and then ¥115, while sellers are going to need a drop through last week’s low at ¥112.60, which could target the ¥111.4 low from the beginning of the month. 

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