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

The pound is fighting to hold $1.26, while the euro’s gains continue.

Dollar and sterling notes
Source: Bloomberg

GBP/USD rallies on political news

David Davis’s suggestion in parliament yesterday that the UK might pay for single market access caused the pound to rally, once again indicating it is political news that is having the main effect here.

However, despite the bounce GBP/USD fell back from its mid-November high at $1.2650. If the price remains below here then a move back to $1.25 cannot be ruled out.

A close above $1.2650 targets $1.2865.

EUR/USD upward move continues

A strong performance yesterday means the move upwards here remains intact.

The next areas to watch are $1.0714 and then $1.0825.

Dips this week back to $1.0550 and $1.0525 have brought out fresh buyers.

USD/JPY still in retreat

Dollar-yen continues to retreat from its highs near ¥115. A close below Y113 is likely to trigger a move down to ¥111.44, and then potentially on to ¥110.

A turnaround today would see the pair test ¥115 again and then head on to test ¥116.90.

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