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

The dollar is weaker as the Fed begins its two-day meeting, but given the recent trends in FX markets this may not last long.

EUR/USD rallies into possible selling zone

The EUR/USD is making another attempt to break higher, spiking towards $1.137.

But such surges have not turned out well over the past month. We would need to see a close above $1.14 to provide more evidence that this breakout has some strength behind it. Otherwise it will merely provide another selling opportunity.

GBP/USD on the up for now

GBP/USD continues to rebound from the lower low created last week, but it now needs to clear trendline resistance from the November highs, which would suggest a push to $1.27.

A failure to maintain these gains would be another selling opportunity. Above $1.27 the $1.2773 area comes into play.

USD/JPY back to crucial support

The area around ¥112.30 has been crucial support over the past six weeks for USD/JPY, so if this holds a bounce back to ¥113.60 is possible.

A failure to hold the zone brings ¥111.30 into play, the lows from late October. It will be crucial to watch the intraday price, to see if a rally from the lows has legs. Any bounce that fails to recover ¥113.00 would be a selling opportunity.

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