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

The trend appears to be back in play as we go into a highly volatile day, with EUR/USD, GBP/USD and USD/JPY looking likely to favour dollar strength.

Source: Bloomberg

EUR/USD selling off from Fibonacci resistance

EUR/USD is gradually moving back into the bearish mindset that dominates the medium-term outlook. This morning has seen the pair rally into both trendline and Fibonacci (76.4%) resistance, subsequently posting a doji before selling off. With that in mind, further losses seem likely, with a move back down to $1.1053 on the cards.

As such, a bearish short-term view is in play, which corresponds with the medium-term outlook. An hourly close above $1.1100 would be required to negate this bearish view.  

GBP/USD looks set to continue downtrend

IN_GBPUSD has seemingly formed a lower high this morning, following on from a move back into $1.2878 support. The fact that we have seen the pair form a flat rather than rising low highlights the fact that this retracement could be weakening.

With that in mind, a bearish view is in play unless we see a break back above $1.3047. However, for greater confirmation, an hourly close below $1.2878 should provide sufficient confidence that the downtrend is set to continue. 

USD/JPY rally unlikely to last

IN_USDJPY is moving higher this morning, following on from an overnight move lower. On this occasion, we have the confidence that the medium-term bearish outlook now matches up with the short-term view. With that in mind, another leg lower is highly likely as long as price does not break and close (hourly) back above ¥100.97.

Watch out for Fibonacci retracements as good entry points, with the past two pullbacks being capped around the 76.4% and 61.8% levels. 

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