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

USD strength following Friday’s non-farm payrolls means that USD/JPY is finally moving higher, while weakness in sterling means more downside ahead for GBP/USD.

Euro and US dollar notes
Source: Bloomberg

GBP/USD still lacking strength
Weakness in sterling goes on, although for now the $1.30 level is holding. A break below here would head towards the July post-Brexit lows, around $1.2790.

Any bounce needs to clear $1.35, which stifled a rally back in July. Any strength in IN_GBPUSD is likely to be treated as a fresh selling opportunity.

EUR/USD heading lower
Having reversed sharply at $1.1223 last week, it looks like further weakness is in store here, with the first stop being around $1.10 and then $1.09.

The uptrend from December finally appears to be running out of steam, although it will take more to really change the prevailing direction. Any move above $1.1223 would target the June high at $1.14.

USD/JPY looking to bounce
The most recent leg down in this longer-term downtrend seems to have run its course, with a close above ¥102.50 likely to confirm that a bounce is in progress.

Nonetheless, even though the pair did not make a fresh low it still looks like the downtrend is still in effect, so any bounce back towards ¥104.50 may well bring out fresh sellers. Support for now lies around ¥100. 

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