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

Dollar strength last night has faded somewhat, with good PMI numbers putting new life into cable and EUR/USD. 

JPY notes
Source: Bloomberg

EUR/USD fighting back after Fed meeting

EUR/USD continues to trade in a 100-point range, with purchasing managers index (PMI) numbers this morning helping to put some fight back into the euro after a relatively hawkish Federal Reserve meeting yesterday.

Still, the price will need to clear $1.0950 to ensure further gains. Support is available around $1.0850 and then $1.0830, beyond which we look to the bottom of the April gap higher, at $1.0778.

GBP/USD expecting greater direction

GBP/USD's early weakness this morning has been turned around, while the key services PMI is expected to provide greater direction. The $1.2846 support has been held, so we could see a move back towards $1.2965, the high from the end of April.

Weakness would suggest a test of $41.2846 and then down to $1.2775, which held throughout late April as support.

USD/JPY pushing higher

The Fed meeting last night fired up USD/JPY, pushing it to its highest level since the second-half of March. Now the crunch time is upon us, as the price hits the descending trendline off the January high.

If the price fails to move above ¥113 sellers may return, although the daily chart requires a move above ¥115.50 to create a new higher high. A drop from here would suggest a move back to ¥111.70 and ¥110.

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