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

Losses continue for EUR/USD, while there seems to be no stopping for USD/JPY. 

USD/JPY notes
Source: Bloomberg

EUR/USD more downside is possible

EUR/USD has suffered two days of heavy losses, and has begun nosing its way through support levels at $1.0950 and $1.09.

Already an overnight rally appears to be losing steam at $1.09, providing further indications that more downside is possible. Key short-term support lies in the area $1.0829-$1.0851, and if this is broken then we may well see a swift move to the rising trendline from the December lows. A recovery above $1.09 would suggest a move back to resistance at $1.10.

GBP/USD awaiting BoE meeting

GBP/USD has been moving tentatively higher, recovering from a dip to $1.2850 last week, but is showing a degree of hesitation around $1.30, with tomorrow’s Bank of England (BoE) meeting and inflation report undoubtedly contributing to the air of caution.

Key support remains at $1.2850 in the event of any turn lower, while below this, the rising March trendline comes into play around $1.27.

USD/JPY pushing higher again

The surge from ¥108 has continued, with USD/JPY pushing on through the descending trendline from the January high. On the daily chart there is now little in the way of resistance before ¥115.50, the high from March and key resistance throughout the first quarter of the year.

Above this, we have a downtrend line that runs back to August 2015, and would suggest momentum would carry the pair all the way to ¥116.50. It would need a move back below ¥113 to suggest that a turn lower is at hand. 

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