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

Dollar strength comes back into play, but will it last?

Euro and US dollar notes
Source: Bloomberg

EUR/USD consolidates after ECB drop

EUR/USD sold-off sharply yesterday, following on from an European Central Bank (ECB) announcement which seemed to have something for both bulls and bears alike. The bears certainly won out, with price falling back down to the $1.0600 mark.

For now, we have not necessarily negated the resurgence of the pair that has been playing out over the past week. As such, we need to see an hourly close below $1.0525 to point towards another strong leg lower.

However, in the near-term, the break from this current consolidation could provide us with the clue of what is to come.

GBP/USD downturn looks set to persist

GBP/USD has been selling off heavily this week, following a rally into $1.2775. With yesterday’s break below $1.2568, the short-term downtrend remain intact. With that in mind, any short-term strength looks like it will result in another move lower, unless we see an hourly close above $1.2705.

Given the wider uptrend in play over recent months, there is a good chance the bullish sentiment will return in the not so distant future. However, this may not come quite yet.

USD/JPY in the ascendancy once more

USD/JPY has been moving steadily higher over the past 24 hours, following on from a period of weakness. The pair is clearly trading within a consolidation phase and as such we need an hourly close above ¥114.83 to bring about a bullish picture.

For now, another leg higher seems likely, yet until we break ¥114.83, any gains could be fleeting.

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