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

Both EUR/USD and EUR/GBP have moved into a pivotal level, which will dictate the state of play for the day. Meanwhile, USD/JPY has started to show some signs of short-term strength.

EUR/USD approaches crucial resistance level

EUR/USD has been gaining ground overnight, with the pair approaching the key $1.2288 resistance level. The ability to break through that level will be crucial in determining whether the wider bullish outlook will come back into play.

This would seem likely before long, with the recent descent looking like a retracement of the previous gains. As long as the price remains below $1.2288, there is still a chance it will start to turn lower again. With that in mind, keep an eye out for whether we can break through near-term resistance, as a guide on where we go from here.

EUR/GBP back to crucial support zone

EUR/GBP has been selling off from the top end of its descending channel formation, with the price moving back into £0.8809 support.

That level will be crucial for the day going forward, where a convincing break to the downside would complete a double top formation. Of course, given the significance of this level, there is a chance we could see a rebound too. However, what with the wider trend, there is a strong chance that we will soon see the price fall back towards the lower half of this channel.  

USD/JPY could move into more bullish period

USD/JPY has broken higher from a descending wedge formation, with the price rallying through the ¥110.98 swing high.

This brings about a heightened chance of a bullish retracement for the pair, with the price falling into the 76.4% level. A move back below ¥110.19 would negate the possibility of short-term gains. However, for now, there is a chance we could start to see an immediate period of strength for the pair.

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