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

With yesterday’s big move in oil, there is a good chance the USD/JPY sell-off and USD/CAD rally could be back on the cards. Meanwhile, the drop in GBP/USD signals a shift into bearish territory once more.

Pound and dollar
Source: Bloomberg

EUR/USD rising, yet will it break resistance?

EUR/USD has been rallying overnight. However, with the past three days seeing selling dominate for this pair, we are working within a short-term downtrend.

The stochastic is clearly overbought and with the MACD signal line at trendline resistance, there is a good chance we could see the pair sell-off once more to remain within the trend.

As such, while further upside is likely to come back into play at some point, we have seen no signal to say that this is now and thus the bearish view remains with support levels of $1.1118 and $1.1086 the next to watch.

This bearish view would be negated with an hourly close above $1.1193, which would then look towards $1.1252 and $1.1338 as the next key resistance levels.

GBP/USD sell-off back in play

The choppy nature of GBP/USD recently has made it a difficult pair to day trade. However, yesterday saw a drop through the crucial $1.4351 support level to bring a clear bearish outlook.

Essentially this paints the past month as a retracement following the strong sell-off which dominated the beginning of the year. Thus the downtrend looks like it is back on the cards.

As such, a bearish view is in play, with a closed hourly candle back above $1.4309 needed to negate this view. Support levels to watch are at $1.4230 and $1.4149.

USD/JPY gradually moving lower

USD/JPY has started to turn lower over the past 24 hours, following on from a resurgence last week. While we are seeing a possible move higher from the 100-hour simple moving average, this is likely to be sold into for another leg lower.

The key here is ¥114.39, where a closed candle above this level would negate the bearish view. Essentially this is a continuation play of both the overarching sell-off seen earlier in the year, but also the trend seen over the past 24 hours.

The key near-term support levels of note are ¥113.20 and ¥111.66, with resistance at ¥114.39, ¥114.87 and ¥115.26.

USD/CAD bounces back

USD/CAD saw a major spike yesterday, driven by the sell-off in crude prices. The current price action looks a lot like a bullish continuation pennant which would fit the notion that we are looking to return to the primary uptrend which this market has been in over the past three years.

Thus a bullish view is now back in play, with resistance levels of C$1.3911, C$1.3967 and C$1.4000 in view.

Alternately, a closed hourly candle below C$1.3842 would bring a more neural view into play, with C$1.3816 and C$1.3706 the next major support levels. 

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