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

Federal Reserve week arrives, so all eyes are on the dollar, especially on a day with so few macro drivers. 

Pound and dollar
Source: Bloomberg

GBP/USD eyes $1.24

Weakness towards $1.2550 brought out buyers last week, and the pair has moved back above $1.26 in early trading, in what is a busy week for UK economic data.

We would need to see the price move back above $1.27 to suggest that the dip has run its course, which would then open the way to the month’s high above $1.2760.

A push lower from $1.26 needs to clear $1.2550, which would then open the way to $1.24. 

EUR/USD could see $1.0620

After the post-European Central Bank drop the pair has stabilised above the key $1.0525 level. Bears will have a lot of work to push the price below here, particularly given that euro shorts have hit their highest level since 2014.

A bounce is pushing the price back to $1.0580, and above here the next area to watch is $1.0620. From here the price needs to clear $1.07 to indicate the post-ECB weakness has run its course. 

USD/JPY could find support at ¥111.44

All eyes are now on ¥115.97, a previous area of strong support in late 2014 and through 2015. A move above here suggests ¥118 and ¥120 will be tested in short order.

If the price moves lower then clear support is possible at ¥114.55 and then down to ¥111.44. Bulls are firmly in charge ahead of the Fed but it seems that there is little the committee can add to justify further USD strength in the second half of the month. 

AUD/USD could see November low

The $0.75 area has capped gains in AUD/USD since late November, with the price faltering towards the end of last week. Since last Monday buyers have mounted a spirited defence of $0.7420, so this is the first level to watch on the downside.

The $0.7360 mark and then the November low at $0.73 then become the levels to monitor. A rally must manage a daily close above $0.75, to open the way to $0.76. 

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