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

While the euro remains above key support this morning, sterling’s break lower yesterday paints an ominous picture. Meanwhile, USD/JPY looks set to try for another move higher.

EUR/USD still holding $1.15

Monday’s dip into the support zone around $1.15 brought out the buyers, so a push for EUR/USD towards descending resistance around $1.17 may not come into play.

Beyond this, the $1.18 and $1.1852 levels are areas of possible resistance. We continue to wait to see if the price can break through the zone of support that has persisted since the end of May, which would likely signal a continuation of the declines from mid-April.

GBP/USD eyes fresh lows

GBP/USD broke the $1.30 level yesterday, establishing a new lower low in its downtrend from the May highs. Rallies have lasted a few days over the past four months, but have then become an excuse for further selling.

We would need to see a break back above $1.32 to suggest that this bearish view has played out and has been replaced with a near-term bullish outlook. Further declines below yesterday’s $1.2920 low would bring the $1.2773 low from August 2017 into view.

USD/JPY still in uptrend

The overall move higher for USD/JPY from March remains intact, with the recovery above ¥111.00 confirming the more bullish view.

A steady push higher over the past two weeks indicates that the buyers are still in charge, with a move below ¥110.50 needed to negate this outlook. Further gains will target declining resistance around ¥111.50, and a break above here would break the downtrend from the mid-July high, and open the way to ¥112.00 and ¥113.00.

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