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

Markets are still dealing with dollar strength, with EUR/USD having broken a key trendline. 

Source: Bloomberg

GBP/USD puts bears in control

Cable continues to push towards the lows of last week’s sudden drop, but buyers came in last night around the $1.21 level.

However, it may be that the market uses this as an excuse to sell into strength, so unless the price gets back above $1.2350 it looks like the sellers still have the upper hand.

First support is possible around $1.21, but through here, the next target would be down towards $1.18. 

EUR/USD still showing weakness

Two big days of losses have seen the euro break a key trendline that has held since December 2015, with the pair now at potential support at $1.1045.

A close below here would take the price on towards the July lows at $1.0950. Oversold intraday conditions persist, but any bounce that fails to move back above $1.11 is likely to be seen as a fresh selling opportunity. 

USD/JPY struggles to make gains

The ¥104 level continues to act as major resistance, with the pair unable to hold above this level. So far, a dip to ¥103.20 last night brought out buyers, but the rally from the October low needs to create a new higher high above ¥104 to maintain momentum.

A firm close below ¥103 might suggest that the bounce has run its course, in which case we would look to the 50-day simple moving average (SMA) at ¥101.82 and then the ¥100 level that has held since July. 

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