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

Britain’s PM has sent sterling slumping again, while it looks like more gains are in store for the US dollar against key currencies such as the yen.

GBP/USD slumps on Brexit announcement

The prime minister’s announcements on Brexit have sent sterling heading lower once again, with the August low of $1.2865 now being tested. Below this it is just a short journey to the July low at $1.2796, and then from here we are into levels not seen since the mid-1980s.

For now it certainly looks like the sellers are in control, so unless the pair moves back above $1.29 bulls are likely to be disappointed. Resistance is likely around $1.2915 and then $1.2945.

EUR/USD buyers may be able to stem the tide

Gains have stalled here around the $1.1240 mark, as the pair moves back from overbought conditions on the intraday chart. With Germany closed for the day there is little chance we have fresh news on Deutsche, so the buyers may be able to hold back further downside.

Last week saw dips run out of steam just above $1.1180 (although Friday’s dip took the pair as low of $1.1160). Any rally needs to clear the ongoing downtrend line off the August highs, which would suggest a clear push through $1.1270. 

USD/JPY off the last week’s lows

The pair pushed off the lows of last week around ¥100, and the uptrend so far remains intact. Now it has to move on beyond ¥101.80, which would clear the way to ¥102.40.

Dips on Thursday and Friday were met by buying at ¥100.80, so this is the first area to watch for support, with ¥100 below it. So long as ¥100 holds, it is hard to escape the impression a bottoming process is underway here after a steady decline thus far in the year.

USD/CAD capped by 200-day SMA

Last week saw the 200-day simple moving average (C$1.3224) cap progress to the upside, with the result that the sellers have taken over. Downside targets lie around C$1.3030, while below this we look to the August low at C$1.2775.

Any bounce could find resistance around C$1.3180, but a break above here would put the pair back on course to the highs of last week at C$1.3280.

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