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

The euro’s rally has come to a key resistance level, while cable faces the choice of two trendlines. 

Dollar and pound sterling
Source: Bloomberg

EUR/USD surge hits key level

EUR/USD’s spike to the $1.1858 level has brought out the sellers, with the risk being that this rally has run its course. A bullish signal will be a move back to $1.1858, and a close above this, and then ideally above the October high at $1.1879. This would then open the way to the $1.20-$1.21 peak from September.

 A turn lower targets $.1662, and then $1.1574. The four-hour chart has seen its downtrend from the September high broken, so the retracement overnight may see the line tested from above, before moving higher.

GBP/USD stuck between a rock and a hard place

GBP/USD continues to respect the downtrend line off the September highs, with rallies having been sold. Now, however, the price is running towards the rising trendline from the March lows.

A break below this, and then through $1.31, will target the November low at $1.3050, and then down to $1.2811. A move back above $1.32 will then see $1.3268, and then $1.3341 tested. 

USD/JPY recovers and aims to move higher

A steady pullback for USD/JPY has bounced off the 50-day simple moving average (SMA) at ¥112.56, with a follow-through from this likely to target ¥114.00 and ¥114.37.

A close below the 50-day SMA would suggest a deeper retracement, to the key ¥111.68 level. 

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