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

After a pullback, cable appears to be on the move higher, while USD/JPY has hit a key inflection point.

US dollar and Japanese yen notes
Source: Bloomberg

GBP/USD buyers appear to be in charge

Having hit $1.24 late on 17 January, the pair dropped back towards $1.2250 before finding fresh buyers. It then broke through the descending hourly trendline that could have constituted resistance. We now look to see if it can move above $1.2356 and then $1.24.

Above here the $1.26 level is the next area to watch. The sharp rally earlier this week would seem to indicate the buyers are now in charge. It will take a daily close below $1.22 to dispel this notion.

EUR/USD uptrend remains

Despite failing to break $1.07 earlier in the week the uptrend here may not be done yet. The dip overnight took the price to $1.0620, before buyers stepped in.

A move higher will need to clear $1.07 and then push towards $1.0733 and $1.0824. A drop below $1.06 would begin to suggest that the bounce has run its course. 

USD/JPY pullback looks to be coming to an end

We may be seeing the end of the USD/JPY pullback, particularly if the price can hold above Y114.50. A close above Y115 would open the way to the Y116.76 level, and then on to Y119.

However, with the price overextended in the hourly time frame some profit-taking may be in evidence. Nonetheless, sellers will need to get the price below Y114, and in short order, to avoid momentum shifting to the upside. 

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