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

The US dollar appears to be gradually coming back into favour, with marginal gains against the euro, sterling and yen. How long will that strength last?

Euro
Source: Bloomberg

EUR/USD back to key support level

EUR/USD has sold off once more, with the pair breaking through the 50-hour simple moving average support to push towards the crucial $1.1335 support level. We have seen this pair bounce from close proximity to this level on four occasions and thus another spike could be on the cards.

Shorter term intraday charts are worth watching for signs of a reversal at that level. Alternately, an hourly close below that level would provide a bearish signal of a potential break lower. At which point the Fibonacci support levels of $1.1291, $1.1257 and $1.1214 come into view.

GBP/USD choppy below key Fibonacci level

IN_GBPUSD's rally has come under question after yesterday’s sharp sell-off from the 76.4% retracement. This break below $1.4227 means we have both lower lows and higher highs. As such, the next move is crucial, with an hourly close below $1.4197 pointing towards a bearish reversal, with $1.4170 and $1.4100 the next near-term support levels.

Alternately, a closed hourly candle above $1.4279 points towards a resumption of the recent rally, where $1.4317 and $1.4352 are the next key resistance levels. 

USD/JPY back to key resistance level

IN_USDJPY has been finding a bid over the past two days, following on from a massive deterioration last week. However, it is now approaching the key ¥109.10 resistance level, which represents a double-bottom neckline. Crucially the projected target of that double bottom is back up to the crucial ¥110.66 level. For now, the key is whether ¥109.10 can be broken.

Should we see an hourly close below ¥108.44 it would mark a return of the bearish view that is held for the longer term. However, a break through ¥109.10 would signal a short-term bullish view. 

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