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

Sterling grabs the headlines, with GBP/USD falling into trendline support this morning. Meanwhile, the dollar is gaining this morning, with EUR/USD turning lower and USD/JPY moving higher.

Source: Bloomberg

EUR/USD turning lower amid dollar resurgence

EUR/USD has been moving lower this morning, following on from the largely sideways price action overnight. The pair has been gradually moving higher over the past week, yet the clearly defined downtrend looks likely to persist soon enough.

The signal that we are going to see the price turn lower in a meaningful manner would be a break through $1.1626, and in particular $1.1606. Until then, there is still a chance we could be looking at a retracement of the $1.1606-$1.1687 rally.

GBP/USD falls back into trendline support

GBP/USD sold off sharply in response to the Bank of England (BoE) meeting, with ‘buy the rumour, sell the fact’ in play yet again. This has taken us back into the trendline support of the recent broadening formation.

That trendline is also accompanied by the October low of $1.3030. That level will be the key area to look out for, with a break higher or lower from here likely to set the trading direction for the day. As such, look out for an hourly close below $1.3030 for a bearish view, while an hourly close above $1.3077 would point towards some form of rebound for the pair. 

USD/JPY approaching trendline resistance

USD/JPY has been moving higher once more this morning. However, with trendline resistance up ahead, there is a good chance we could see this move stopped in its tracks once again.

The bullish breakout signal we would be looking for comes with an hourly close above ¥114.22. However, with a crucial historical resistance zone around ¥114.37-¥114.45, we still have a significant amount of resistance to break through before a strong bullish outlook comes into play.

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