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

The US dollar is once again in the ascendancy against the euro and the yen, but a rally in oil is helping the loonie to recover some lost ground. 

Pound and dollar
Source: Bloomberg

EUR/USD eyes 50-day SMA

The pair has returned to the lows of 7 October, pushing down to $1.11 and through the vital September low at $1.1123.

A push through $1.11 would put the pair below the rising post-December 2015 trendline, and could see a test of the August low at $1.1042, or even down to the July low at $1.0950.

Any bounce needs to get back above the 200-day simple moving average (SMA) at $1.1170 and then clear the 50-day SMA at $1.1205. 

USD/JPY could drop to ¥100

Price action this morning has already seen a dip towards ¥103.75 bring out the buyers, with the uptrend intact. The pair has yet to close firmly above ¥104, and we really need a close above the 2 September high of ¥104.32 to indicate that a breakout is in progress.

A failure to get beyond this level could suggest a return to the 50-day SMA at ¥101.78, or even back down to the August-September lows around ¥100.

USD/CAD could see further weakness

A sharp rally in crude yesterday put USD/CAD back below the 200-day SMA once again, with the C$1.3200 area still proving to be a major barrier to further progress.

The price has bounced back from the overnight lows, but a failure to move on firmly through C$1.32 likely to suggest further weakness ahead, potentially targeting the 50-day SMA at C$1.3061. 

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