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

EUR/USD and GBP/USD retrace lower following on from recent gains, yet with the payrolls around the corner, how will the things stand going into the release?

Euro dollar
Source: Bloomberg

Will EUR/USD rally once more?

Yesterday saw EUR/USD rally heavily towards the back end of the session, with the break through $1.0881 signalling a bullish outlook which followed through with over 90 points upside.

Overnight we have seen the pair consolidate somewhat and this would be expected to persist into the payrolls release should we see a break below todays lows of $1.0935. However, should we see a break and hourly close above $1.0967, this could point towards another move higher for the pair, with resistance levels at $1.0986 and $1.1016.

Be aware that the payrolls release will be a big volatility event and can easily take out stops if you have near-term positions.

GBP/USD pulls back towards Fibonacci support

GBP/USD is easing lower, following on from yesterday’s strong rally for the pair. Set within the clear uptrend this week, this pullback looks like a short-term retracement before another leg higher.

Interestingly, this pair has seen Fibonacci retracements work perfectly given the Tuesday rally from the 61.8% and yesterday’s respect of the 38.2% pullback. Thus it is worth looking for support around the 1.4108 (38.2%), 1.4113 (50%) and 1.4094 (61.8%) levels.

It is also worth noting that we have a clear Elliott Wave count in play here, which means some will be looking for the next bounce to fall short of yesterday’s $1.4194 high. However, for now, the bullish view remains as we look for another bounce from Fibonacci levels.

USD/JPY turning lower within triangle

USD/JPY is seemingly turning lower, as the pair seeks to remain within a descending triangle formation that is in play. With the stochastic overbought and lower highs in play over the past two days, it seems likely that we will turn lower as people shift towards the yen ahead of the week’s big risk event.

In particular a closed hourly candle below ¥113.74 support would provide expectations of a return to the ¥113.20 region. Look out for the ascending trendline potential support too.

Support levels of note are ¥113.74 and ¥113.20. A break through ¥114.27 points towards a resumption of the recent uptrend with resistance levels of ¥114.55 the next levels of note. 

USD/CAD in choppy downtrend

We are seeing a gradual move higher for USD/CAD this morning, with a move back into trendline and 50-hour simple moving average resistance.

Given that price typically fails to sustain price action above these levels, another move lower seems likely. The stochastic is also just moving into overbought territory, adding more to the bearish view.

As such, another move lower seems likeliest, with that view negated if we break and hourly close above C$1.3473.

Support levels of note are C$1.3386 and C$1.3371, with resistance levels at C$1.3473, C$1.3481 and C$1.3500. 

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