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

The euro is trying to rally, while USD/JPY is poised above key support.

Euro and dollar notes
Source: Bloomberg

EUR/USD taking small steps up

A small bounce for EUR/USD yesterday is a possible sign that the bulls are gathering strength, but we still need to see a push back above $1.0689 to confirm that a really bullish move is underway on the hourly chart.

Any failure below this simply constitutes a new lower high. However, it would be a good sign if the pair moved back above $1.06 on the daily chart, signaling that the rally off the December lows is still intact. A close below yesterday’s lows of $1.0569 would signal a possible drop to the February low around $1.0494.

GBP/USD losing momentum

GBP/USD recovered the $1.2376 level yesterday, reversing some of Friday’s losses. However, momentum appears to be waning, and still needs a push above $1.25 to reverse the negative short-term trend.

A drop below $1.2376 would suggest that bears have the upper hand once again and could suggest a drop back to the rising trendline off the October low, which would indicate a target around $1.22.

USD/JPY tested

Once again USD/JPY finds itself testing the rising trendline off the November low. It held this last week, but a close below it would be a bearish signal.

A further decline below ¥110.11, the key low of March, would suggest that a move to ¥107.45 and then ¥105.53 is in the offing. Bulls need to break ¥111.58 to create a new higher high and thus provide the potential for a move higher in the longer term.

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