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

GBP/USD upside grabs the headlines, yet with EUR/USD weakening and USD/JPY rallying, the dollar appears to be gaining ground after progress on tax reforms.

Source: Bloomberg

EUR/USD break through low could bring short-term downside

EUR/USD pulled back below the $1.1837 level overnight, with the price moving into trendline support.

However, despite that trendline holding, there is a good chance we could see further downside in the short term. As long as we do not see the price move back above $1.1920, then a bearish short-term outlook is in place. 

GBP/USD rallies into trendline resistance

GBP/USD has seen an incredibly volatile 24 hours, with tax reform and Brexit news benefitting the dollar and pound in turn. The rally we have seen has taken the price back above the $1.3338 level, which represents the top of its two-month range.

While this points towards the potential for further upside, it is worthwhile noting that we could see trendline resistance respected. As such, either look for retracements, or a break through trendline resistance, to point towards potential buying opportunities. 

USD/JPY rallies back into crucial resistance level

USD/JPY managed to rally back into the ¥111.66 level last night, following on from the news that the US tax reforms took another positive step.

That level is going to be crucial in determining the next move from here, with an hourly close above ¥111.66 pointing towards further upside. However, until that happens, we have a clearly defined bearish trend in place, which highlights the possibility of further downside. 

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