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

The dollar comes back into strength, with EUR/USD, GBP/USD and USD/JPY all suffering at the hands of the greenback.

EUR/USD forex pair
Source: Bloomberg

EUR/USD reverses lower from resistance
EUR/USD is once more turning lower, having rallied into the 50% retracement and trendline resistance overnight. We remain within a clearly defined downtrend over the past month and thus we would need to see an hourly close above $1.1217 to negate this trend. As such, a bearish view is preferred for a move back down to $1.1098 support.

GBP/USD crashes lower after early gains
GBP/USD has experienced a topsy-turvy morning, with initial strength turning ugly with a sharp move lower in the past four hours. While the bullish medium-term picture remains in play, this move below $1.4624 is a worry and thus it makes sense to remain on the sidelines until we get some form of normality in this market.

One thing is clear, the most notable level to the downside is $1.4587, which would need to be broken for this move to have any bearish implications for anything other than the short-term. Key resistance levels are $1.4642 and $1.4668.

USD/JPY consolidates after triangle breakout
Last week saw USD/JPY rally out of a symmetrical triangle formation, with the pair consolidating most of yesterday. We have a clear descending triangle pattern in play here and given the sharp move into it, another move higher seems likely.

However, it is worth noting there are some really big challenges up ahead, with ¥111.47 and more importantly ¥111.89 needed to clear out before the medium-term bearish trend is negated.

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