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

Cable is dropping as policymakers turn dovish once more, while USD/JPY falls back from key resistance. 

EUR/USD notes
Source: Bloomberg

EUR/USD breaks resistance

Yesterday saw EUR/USD break long-term trendline resistance, pushing to its highest level since May last year.

This breakout could be followed by some weakness, but so long as the price does not drop back below $1.1445 the short-term bullish picture remains intact. 

GBP/USD downtrend remains

A shift in dovish sentiment continues to weigh on cable, with GBP/USD heading towards the $1.2775 and $1.2708 support levels.

Below this, we would look to the June lows at $1.2616. The downtrend line off the July high remains firmly intact, and even a push back to $1.29 would not change the current direction of travel. 

USD/JPY pushing lower from resistance

USD/JPY has turned lower from resistance at ¥114.37, replicating the move seen in mid-May. It has also broken the rising trendline off the June lows.

With the pair now oversold intraday, we will see if a bounce can recover the 100-hour simple moving average (SMA) and ideally recover ¥114, if this is done then a revival of the rally is possible. However, If the price stays below ¥114 then the likelihood of further losses increases. 

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