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

With EUR/USD and GBP/USD falling, amid a resurgence in USD/JPY, it seems the dollar is coming back in vogue.

GBP/USD figures
Source: Bloomberg

EUR/USD drifts towards key support

EUR/USD continues to move lower, as it approaches the crucial $1.1109 support level. The break below there would provide a bearish picture for the short term. However, given that we are trading within a falling wedge, there is a good chance that we will see a break higher soon enough.

Ultimately it seems to be a case of which will come first, a break below $1.1109 would point towards any bounce, but is as likely a precursor to further downside.

GBP/USD looks set for next leg lower

Consolidation in GBP/USD didn’t last long overnight, with the price faltering after a rally into the previous support level of $1.2635. We are now seeing cable push lower once more, which is likely to provide further losses for this currency pair.

As long as the overnight high of $1.2635 remains intact, it looks like we will head lower towards the 76.4% retracement support at $1.2527.

USD/JPY expected to turn higher once more

USD/JPY managed to fleetingly break through the crucial resistance level of ¥111.71 overnight, following a strong surge higher over recent days. While we are moving lower this morning, we would need to see ¥110.64 breached if we are to look for a deeper pullback.

With that in mind, look out for support around 61.8-76.4% (¥111.08- ¥110.94), as a potential area where this pair could turn higher from. A break below ¥110.64 would point towards a retracement of the wider ¥108.82- ¥111.79 rally. 

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