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

Risk assets are in retreat, with AUD/USD sharply lower and USD/JPY failing to recover its upward momentum.

Pound and dollar
Source: Bloomberg

GBP/USD eyes mid-2010 support

Cable came storming back yesterday, putting itself back on course for higher highs. With such a resurgence on Monday, dips today will likely be seen as buying opportunities.

A move back to $1.4450 would then clear the way to head back to $1.4577, and then on towards $1.47.

Only a move back below $1.4320 would indicate that weakness is in store, and then we look to key weekly support from mid-2010 at $1.4230.

EUR/USD could move to 200-day SMA

Most people will have been glad to see the back of January where EUR/USD is concerned.

So far the price continues to bounce between $1.08 and then $1.0950, with the strong recovery of the past two days suggesting that this rangebound trading will continue.

Any break higher needs to clear $1.0950, and also move above the long-term downtrend line. This would then allow the bulls to contemplate a move towards $1.10 and possibly on towards the 200-day simple moving average at $1.1053.

A failure at the downtrend line would suggest the sellers are in control again, which would take us back towards $1.0840 and then $1.0790.

USD/JPY could target ¥123

 If the pair doesn’t get back above ¥121 soon, then it looks like the bounce has run its course.

A sustained move towards ¥120 would indicate that a new leg lower is in progress, with targets down towards ¥119.08 and then ¥118.

Any move back through ¥121 would then target ¥122 and ¥123.

AUD/USD could head lower

AUD/USD’s rally has stalled around $0.71, with bounces above here unable to gain traction. With indices and oil in retreat, it would not be surprising to see this pair head lower too.

A move below $0.7040 would target $0.7010 and $0.6980. It would take a firm close above $0.7140 to reignite the upward move. 

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