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

US dollar weakness remains the name of the game, with EUR/USD and GBP/USD gaining ground, amid weakness for USD/JPY.

EUR/USD hits new three-year high

EUR/USD has punched through a crucial resistance level this morning, as news of a breakthrough in German coalition talks seemingly raising the chances of a continued Angela Merkel leadership.

The push through $1.2092 provides a new three-year high, and moves the pair into a region with very little resistance within close proximity. As long as the price remains above $1.2027, a bullish view remains in place, with retracements or period of consolidation looking like buying opportunities.

GBP/USD rallies after 50% retracement

GBP/USD has managed to break through the notable $1.3562 swing high this morning, coming off the back of a retracement into the 50% Fibonacci at $1.3457.

The fact that we have seen the price break through $1.3562 points towards further upside to come, with a rally through $1.3613 looking likely from here. A break back below $1.3457 would only serve to paint a picture of a deeper retracements, with a move below $1.3301 needed to negate the wider uptrend. 

USD/JPY weakening following overnight retracement

USD/JPY has continued its downtrend, with the price tumbling yesterday despite the short-term rally seen on Wednesday evening.

We have seen a similar move come into play overnight, with a short-term retracement giving way to further selling. As such, further downside is expected, with a break above ¥111.87 required to negate the bearish view. Keep an eye out for ¥110.84 as the next major support level to breach. 

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