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

The dollar continues to show signs of weakness, with EUR/USD and GBP/USD gaining while USD/JPY fails in its attempt to break higher.

Cashier counting out euro and dollar notes
Source: Bloomberg

EUR/USD extends post-referendum gains

EUR/USD has seen an incredible recovery despite the negative result of Sunday’s Italian referendum, with price breaking out from the $1.0525-$1.0606 range to post a bullish short-term outlook. Despite a short pullback, we are seeing price rise once more, as it moves back towards yesterday’s highs of $1.0796. An hourly close above that level points towards further gains, with key resistance levels of note at $1.0822, $1.0851 and $1.0912.

GBP/USD continues its ascendancy

GBP/USD is once more moving higher, as the recent rally continues apace. It is worth noting price is approaching a crucial resistance level at $1.2796 (July 2016 low). There is likely to be some form of response at that level and bulls should be wary of that price. Nevertheless, a bullish outlook remains unless we see an hourly close below $1.2656.

USD/JPY rally fails to follow through

USD/JPY broke through trendline resistance yesterday in a sign that we could see the pair push into the uptrend once more. However, with price failing to move above 114.83, we have seen a pullback for continued consolidation. As such, we would need an hourly close above 114.83 to provide a bullish outlook, with an hourly close below 113.34 facilitating a more bearish short-term outlook.

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