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

Dollar weakness looks set to persist, with the euro, pound and yen all expected to gain against the greenback.

EUR/USD continues to build a base for potential recovery

Following a 76.4% retracement of the $1.2205-$1.2556 rally, EUR/USD is continuing to consolidate.

With a subsequent shorter-term intraday 76.4% retracement also coming into play, we are now seeing the price turn higher once more. The ability to break above $1.2353 will provide us with the clues of whether this bullish view will gain traction. An hourly close above that level would bring a bullish outlook, whereas a fall below $1.2281 would bring a more neutral/bearish view.

GBP/USD rallying towards trendline resistance

Coming off the back of a 76.4% retracement into trendline support, GBP/USD is pushing higher at the beginning of this week.

The current move higher is bringing us towards the trendline resistance dating back to mid-January. This triangle is expected to continue unless we see a breakout. Such a breakout would come with a rally through $1.4147 or below $1.3800.

USD/JPY falls into Fibonacci support

USD/JPY has been falling since the peak on Wednesday, with the pair dropping into the 61.8% Fibonacci support level.

Given the downtrend in play over recent months, there is a strong chance that we will continue to move lower rather than break higher. While we could see the price bounce from this Fibonacci level, a bearish outlook remains, unless we see a rally above ¥107.90. 

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