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

EUR/USD and GBP/USD are gaining ground, with the dollar starting to weaken once more. However, with USD/JPY rising, there is a good chance that we could soon see the dollar reverse lower against the yen.

EUR/USD continues to retrace upwards

EUR/USD is breaking through the $1.1750 resistance level as the market continues to regain ground in the wake of the recent declines.

This upside is likely to persist over the short term, with the price expected to push towards the 61.8% and 76.4% resistance zone in the near future. However, there is also a chance that we will see a wider retracement should the price manage to break above $1.1998. Until then, a short-term bullish outlook remains in play, with an hourly close above $1.1750 pointing towards a continuation of this morning’s strength.

GBP/USD continues to rebound

GBP/USD has been pushing higher since the trendline break at the end of last month, with the pair also heading towards that zone between the 61.8-76.4% Fibonacci retracements.

Once more we have to question whether we are watching a retracement of the sell-off seen over the past month ($1.3618-$1.3204), or else the wider move from $1.4378. For now, further upside looks likely to bring us into the $1.3460 region. However, whether this is a short-term or longer-term retracement, it does look likely that we are watching some form of retracement rather than reversal.

USD/JPY rally unlikely to last

USD/JPY has been gaining ground of late, with the price rallying into the 61.8% level this morning. The drop below ¥108.64 a week ago looks to indicate a potential bearish shift for the market.

This means that we are looking for a bearish reversal for USD/JPY as long as the price remains below the ¥111.39 level. With that in mind, watch for a potential bearish reversal from either this 61.8% retracement, or else the 76.4% Fibonacci at ¥110.62.  

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