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

The Fed’s meeting has done little to boost the dollar, but that has provided little respite for currencies like the Aussie, Loonie and the euro.

Euro and dollar notes
Source: Bloomberg

UK retail sales and then the BoE meeting are on the agenda for today, and for now these are helping prevent further downside in GBP/USD.

If the pair can move back above $1.42 then we may have seen a short-term bottom, although with the referendum now a week away the downside risk should not be underestimated.

A close below $1.41 leaves the pair on course for a test of the February low at $1.38. Upside targets lie at $1.43 and then $1.45.

A strong bounce has carried EUR/USD 100 points higher, but momentum looks to be fading. If the price fails to push on above $1.13 then the next chance to sell into strength may have appeared, with a first target down towards $1.1180 and then on towards the 200-day SMA at $1.11. If the price recovers then we look to $1.13 and then on to the month high at $1.14. 

There has been a remarkable rally in this pair over the past few sessions, with a steady trend that has afforded no real dips for late comers to enter.

With the price now above the 50-day simple moving average (SMA) (C$1.2860), the next target is the area around C$1.3190, the peaks from the second half of May. 

With intraday prices still overbought it may be best to wait for a more sustained pullback, but the trend remains intact unless the price closes back below C$1.28. 

With little movement from either the Fed or the BoJ, the momentum trade remains in place for the pair. Now that the lows of April and May have been firmly broken, the way is open for an extended move down towards ¥102.

Any short-term rebound would first head towards ¥106, but even a move back to ¥108 would leave the longer-term downtrend intact. 

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