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

Dollar weakness is prompting some interesting moves in FX, after Fed minutes proved to be less hawkish than some had hoped. 

Dollar and yen
Source: Bloomberg

EUR/USD needs to break $1.1850 to overturn bearish momentum

EUR/USD holds above $1.1714, with dips below this level continuing to bring out the buyers over the past week or so.

Momentum indicators remain bearish on the daily chart, while on the four-hour chart, we can see that the downtrend from the 3 August high remains in place. It will need a push above the $1.1850 area to break this. 

GBP/USD with a chance to return to $1.30

Fans of trendlines will be delighted by the current price action in GBP/USD, which has run straight into the rising trendline that has held since March. Thus we can see that any move below this and the 100-day simple moving average (SMA) at $1.2865 would mark a more bearish development, but the bulls now have a chance to push the pair back to $1.30 and higher.

Below the trendline, $1.2775 and then $1.2706 are potential areas of support.

USD/JPY sees August gains disappear

Gains for USD/JPY in August so far have petered out below the ¥111 level, while ¥109 has acted to hold back any further downside.

Bulls will need to post a daily close above ¥111, which would then open the way to the 200-day SMA at ¥112.53, and then ¥114.37. Meanwhile, a loss of ¥109 would then open the path to ¥108.13 and ¥107.45.

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