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

USD/JPY and AUD/USD appear to be at turning points, while Brexit fears have hit GBP/USD once again.

GBP/USD forex pair
Source: Bloomberg

GBP/USD declines continue
Yesterday’s GBP/USD decline has continued into today, although at a gentler pace. Nonetheless, the decline from $1.47 continues, and the likelihood is that we will continue to see weakness in coming sessions, with a rally off the back of oversold levels yesterday and today potentially bringing out further sellers.

The next area to watch is the 50-day simple moving average (SMA) at $1.44. Below this, we look to the rising trendline that has held so far this year, with support coming in around $1.4340.

Time may be right for EUR/USD bulls
The rate of decline here has slowed markedly, and with both the 200-day SMA ($1.11) and the rising daily trendline off the December lows now in prospect, bulls may find their time has come.

Ideally the price needs to close back above the 100-day SMA ($1.1177), and then this would raise the possibility of a move back to the 50-day SMA at $1.1307 and potentially higher for EUR/USD.

A close below $1.1060 would open the way to fresh downside, perhaps as far as $1.08. 

USD/JPY rally comes to a halt
Prime Minister Abe’s decision to defer a sales tax hike may well have spelled the end of the USD/JPY rally that was almost a one way move in May. A close below the 50-day SMA at ¥109.72 would mark the return of the longer-term downtrend, which looks highly likely.

A rally would put the pair back in consolidation mode, but a close above last week’s high at ¥111.50 is needed to indicate more upside is on the way. 

AUD/USD propelled by strong GDP figures
Good GDP numbers have helped the pair to escape the general risk-off atmosphere this morning, although now it needs to close above $0.73 to confirm the new uptrend.

Certainly the pullback from mid-April seems to have run its course, so we remain bullish. A close below $0.72 would dent that view, but it needs a close below $0.7150 to confirm a new leg lower is underway. 

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