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

Despite recent strength, dollar weakness could be on the cards amid 76.4% retracements for EUR/USD and GBP/USD. Meanwhile, USD/JPY is turning lower from a major resistance level.

Source: Bloomberg

EUR/USD retraces into Fibonacci support

EUR/USD returned to the 76.4% Fibonacci support level yesterday, following a break below an ascending trendline earlier in the week. Given the break through $1.2070 resistance last week, the uptrend remains intact unless we fall below $1.1823.

With that in mind, there is a good chance we could see another move higher from here. A bearish view would only come from a move below $1.1823.

GBP/USD turning higher after yesterday’s pullback

GBP/USD sold off into the 76.4% retracement yesterday, with the pair turning higher since.

The uptrend remains intact and, as such, a bullish view remains in play unless we see a move back below the $1.3160 support level. 

USD/JPY weakening from key resistance level

USD/JPY has enjoyed a bullish week, with the risk-on move seeing people shift out of the yen. However, with the price having rallied into trendline resistance, there is a good chance we could see the pair weaken from here. Watch out for trendline support, which marks the first main hurdle to overcome.

Meanwhile, a break back below ¥109.90 would give greater confidence of a more protracted downward move. Given the potential for another North Korean nuclear test, there is reason to believe that any surprise could be bearish for this pair. A break above ¥110.67 would negate this bearish view.

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