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

EUR/USD falls back towards a crucial support level, while GBP/USD attempts to break-lower once more. Meanwhile, a countertrend USD/JPY rally is likely to soon draw the bears back to the table after yesterday’s losses.

Euro notes and dollar notes
Source: Bloomberg

EUR/USD continues to consolidate
​The pair continues to consolidate despite early signals of an upside breakout yesterday. The tops of this range have been less regular, with many coming between 1.1400-1.1413. However, the bottoms have been remarkably consistent, with the pair bouncing from within very close proximity to 1.1335 on four occasions now.

As such, given the current downward price-action, it is worth waiting for a move back to 1.1335 to either see another bounce towards 1.1400 or else a bearish breakdown. Should we return to that level, shorter intraday timeframes are important to gauge which of those two events are playing out.

Support levels of note are 1.1335, 1.1326, 1.1310 and 1.1291. Resistance levels to watch are 1.1376, 1.1413 and 1.1454.

GBP/USD brings support level into question
This week has seen IN_GBPUSD repeatedly come under pressure, with the pair attempting to break through the key 1.4057 support level. We are currently seeing some signs of a bounce, yet given the temporary downside breaches, we would need to see a move back above 1.4170 to gain confidence that the selling is over for now.

As such, for now we are in a discovery phase where a clear break-lower would indicate that the price-action in the last two weeks of March was a top being formed, with the February low of 1.3836 coming back into view.

Alternately, should we see a break and hourly close back above 1.4170, this would point towards a continuation of the range in recent weeks, with 1.4254, 1.4317 and 1.4457 the key resistance levels.

USD/JPY retracing yesterday’s losses
Following on from yesterday’s sharp drop in the pair, IN_USDJPY is rallying in a countertrend move. That fall was largely attributed to the break back below 110.66 support which underpinned the past two months of price-action. For now, traders are likely to be looking for places to get short at the most advantageous level.

For this we are looking at the Fibonacci retracements and in particular the 61.8% (109.51) and 76.4% (109.94) levels. It is worth watching for intraday reversal signals on the shorter term timeframes for a return to the bearish trend. It seems likely that this sell-off has further to run, especially with the head and shoulders top coming in at 107.00.

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