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

The dollar is coming under renewed pressure this morning, with EUR/USD and GBP/USD pushing higher. Meanwhile, we await a breakout from a symmetrical triangle in USD/JPY.

Pound and dollar
Source: Bloomberg

EUR/USD pushing higher once more

EUR/USD is rallying once more following a shallow retracement into the $1.0702 support level yesterday. The pair has been in a long-term uptrend since the turn of the year and this looks to be back in play following the weakness evident towards the end of March and beginning of April.

Now that we have broken higher from the 76.4% base it looks like we are likely to keep trending upwards given the relative lack resistance up ahead. As such, further gains seem likely from here, as long as we do not see a break back below $1.0702.

GBP/USD looking to push higher once more

GBP/USD is rallying after a period of weakness yesterday. The wider picture has seen the pair break higher from a three-month symmetrical triangle.

As such, further gains seem likely, with a break through $1.2859 a good signal that the uptrend is going to come back into play this morning. Until then, any further downside would be seen as a temporary, counter-trend move.

USD/JPY awaiting triangle breakout

USD/JPY is trading within the middle of a symmetrical triangle formation off that back of its recent downtrend. Given that wider sell-off, the expectation is that we will break lower from this formation. However, we can take our lead from the breakout for greater confidence, with an hourly close above ¥109.18 pointing towards a period of short-term strength.

Conversely, an hourly close below ¥108.32 would likely spark the next leg lower for the pair. Alternately, short positions look interesting from near trendline resistance as a play on the continuation of this pattern. 

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