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

An action-packed week for GBP/USD and other sterling crosses is likely, while events in Turkey do not seem to have unduly affected risk appetite. 

Euro and US dollar notes
Source: Bloomberg


Ahead of a busy week for UK data, cable remains relatively positive. It dropped back sharply from Friday’s peak near $1.35, so this is now the area to watch on the upside.

A break above here would head towards $1.3685 and the top end of the gap down at the end of June.

Weakness may see $1.3150 and then $1.31, where downside momentum stalled. A daily close below would head towards $1.2850. 

Friday’s sharp reversal has rather spoiled hopes that we might get a continuation of gains for EUR/USD at the beginning of this week.

Rather, a weak close today, below $1.1060 would suggest a return to $1.10, and from there down to the $1.09 area.

It would take a strong push above $1.1160 to put the bulls back in control.

The impressive bounce here seems to have run its course, as the 50-day simple moving average (¥106.20) combines with the ¥106 level itself, which proved to be resistance at the beginning of May and in mid-June.

Even if further upward progress is seen today, the downtrend line off the February highs comes into play at ¥107, which may limit further gains. 

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