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

The US dollar continues to gain the upper hand in the FX sphere, ahead of the Fed meeting this week.

Euro and dollar notes
Source: Bloomberg

EUR/USD - a bearish development on the way?

It doesn’t seem like there is an abundance of positive momentum in EUR/USD at present. The pair has been treading water for around a month now, with the upward momentum of April and May fizzling out.

As noted yesterday, a move below $1.1109 is the really bearish development, so we will watch today if a bounce can materialise to keep the price off the lows of last week around $1.1172. 

GBP/USD awaiting UK data this week

The drop through $1.2706 is the bearish development that we had been expecting. While UK data this week could rescue GBP/USD, the next area of support to watch would be the $1.2616 area.

A drop below here would raise the prospect of a move down towards $1.24 in the longer term. Bulls need a move back above $1.2775 to indicate that they have managed to wrest back control.

USD/JPY awaiting Fed meeting

There has been a notable recovery in USD/JPY over the past few days, with the possibility that a further rally will recover ¥110.56, the 200-day simple moving average (SMA). Above this, the late May high at ¥111.78 comes into play.

Much will likely depend on the Federal Reserve (Fed) meeting, but those looking for an extension of the 2017 downtrend in USD/JPY will want to see ¥109.50 lost as a prelude to a move back to ¥108.

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