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

Dollar strength is back to stalk markets, wiping out some of yesterday’s gains in EUR/USD and sending GBP/USD down once more. Meanwhile, USD/JPY remains content to hold above the 50-day moving average.

EUR/USD rally peters out

The sellers are attempting to take charge again, pushing EUR/USD back from yesterday’s highs. They still have to break the $1.15 support zone, which would mark a particularly bearish development.

A possible first area of support in case of any sustained downturn comes in at $1.1285. For the time being, the bearish view continues to hold unless the price can recover $1.1630 and then move above the pattern of lower highs that has dominated since May. This would require a move above $1.1760. Any rally that fails to recover this level would likely constitute another selling opportunity.

GBP/USD’s fall still not done

Cable at present provides a perfect demonstration of ‘what goes down…can keep going down’. There seems little stopping GBP/USD’s descent, particularly since the ‘No Deal Brexit’ background music remains in full flow.

Areas of possible support come in at $1.2773 and then $1.26, while even $1.32 looks like too distant a prospect at present. Any bounce that fails to move back above $1.3040 would constitute another selling opportunity, with a bullish view only forming if the price can close above the July highs around $1.32.

USD/JPY fights to hold moving average

Dips for USD/JPY to the 50-day simple moving average (SMA) at ¥110.88 continue to find support, with the fall yesterday being countered to some extent this morning.

A move above ¥111.50 would break the short-term downtrend from the July highs, and open the way to the peak above ¥113.00 seen just over three weeks ago. A break below the 50-day SMA and below ¥110.63 would signal a more bearish move, opening the path to ¥110.00 and lower. 

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