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

European FX heads lower, with EUR/USD and GBP/USD weakening after short-term bounces. Meanwhile, fears over US-China relations has helped the yen strength, sending USD/JPY lower.

EUR/USD heading lower once more

EUR/USD is turning lower yet again, with the pair threatening to break out of the recent period of consolidation that has greeted the widespread losses of last week.

The key to expecting another strong move lower is the ability to break below the $1.1510-$1.1543 support zone. Given the minimal retracement so far, there is still a chance of short-term gains. However, with the price seemingly breaking down, it could make sense to look for a move below $1.1510-$1.1543 zone to signal the next bearish leg.

GBP/USD attempting to break below key support level

GBP/USD has also turned lower, following on from a minimal recovery on Friday. The $1.3204 support level is going to be crucial for the day, and with the price fleetingly falling below that support level to create a new seven-month low, we are seeing signs of a bearish breakdown.

Watch for a close below that level as a signal that we could break lower from here. A rally up through the $1.3300 mark would signal a possible rebound from this key support level. However until then, look for a break and close below $1.3204 as a signal of further downside.

USD/JPY breaking down after recent rally

The yen is in charge this morning, with USD/JPY managing to turn lower following a 76.4% retracement over recent weeks.

The break below ¥109.91 signals the potential for further downside from here, with ¥109.19 the swing low to watch. However, with the price currently respecting the 76.4% retracement, we will also need to see a break below ¥109.60 to further the bearish cause for this pair. 

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