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

The euro has finally paused for breath against the dollar, while the USD/JPY downtrend is gaining momentum. 

euro notes
Source: Bloomberg

EUR/USD bullish outlook seems to persist

After big moves higher over the past three days, it is not surprising to see EUR/USD pause for breath. However, so long as it holds above $1.10, the key resistance from earlier in the month that is now support.

Given that there has been very little in the way of retracements over the past few days, this move is to be welcomed. The bullish outlook persists, with upside targets at $1.1141 and $1.1279, unless we see a daily close below $1.10.

USD/JPY - moving below ¥111.68?

USD/JPY downside case is gathering strength here, with yesterday’s rally creating a new lower low on the hourly chart, together with a firm break below hourly support at ¥113.20.

Now we look to see if the price can move below ¥111.68, which would put it back at the 50-day simple moving average (SMA). Rallies back towards ¥113 should be taken as selling opportunities. 

AUD/USD - more bearish movements?

AUD/USD has hovered between $0.7380 and $0.7440 for several days, with the apparent rally off $0.7340 running into trouble.

The sharp drop today may well spark more bearish movements, but the bounce last week off the post-January 2016 rising trendline would mean that we need a close below $0.7340 to get firmly bearish.A recovery back above $0.7440 would signal more gains to come, towards $0.7473 and higher.

 

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