The pound continues to be under pressure as Brexit talk dominates the news, but it is the fall in USD/JPY that should concern those hoping for continued ‘risk on’ trading.

Source: Bloomberg

GBP/USD feeling Brexit weight
Brexit concerns continue to put cable under pressure, although the January low is holding for now. A breach of this area would put the lows of early 2009 for the pair in focus, at $1.3665 and then $1.3504. Any bounce would run into potential resistance around $1.1450 and then on towards $1.4230.

EUR/USD continues downward trend
A steady downtrend remains in place here, although the pair is showing some reluctance to move on below the lows of yesterday around $1.10. A break below here heads towards the 28 January top around $1.0970, which may provide support, while below this the next area to watch is around the $1.09 level, where support came in on 2 and 3 February.  A move upwards needs to clear $1.11 to signal that the downward move has run its course.

AUD/USD gets a boost
The recovery in risk appetite has boosted AUD/USD, which has broken above the inside trendline that acted as resistance in February, as well as in December 2015, and in January of this year. The next area to watch is the 200-day simple moving average at $0.7280, while above this we watch the October and December peak at $0.7380.

USD/JPY holds, but worries remain
The continued deterioration in this pair is one of the most worrying signs for the ongoing rally in equities. For now the ¥112 level is holding, but if this is broken then it is only a short trip to the month’s lows at ¥111. Below this we look for support to the October 2014 high around ¥110. Rallies back towards the 200-hour SMA at ¥113.32 are likely to bring out the sellers once again

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