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

ECB day will mean the focus is on euro pairs, but there is renewed strength in sterling following yesterday’s job figures.

Euro and dollar notes
Source: Bloomberg

Strong employment data yesterday helped sterling to claw back some of Tuesday’s losses against the US dollar, as the rising trend off the July lows continues.

Yesterday’s dip provided yet another chance to enter the rally, with the pair now targeting $1.3475, where gains faltered on 14/15 July.

For now, pullbacks are likely to be treated as buying opportunities, with sellers requiring a close below $1.3050 to negate the relatively bullish outlook here. 

European Central Bank day has arrived, so we could see increased volatility. So far the pair has shown little inclination to move strongly higher, although if it does we would be looking at a test of $1.1080 and then $1.1140, the highs from earlier in the week. So far $1.1040 remains key support.

The rally goes on here for the pair, with little sign of a dip. However, such strong moves higher have usually created selling opportunities, so any failure to push on above ¥108 would see some downside momentum develop, as the longer-term downtrend reasserts itself. 

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