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

EUR/USD and EUR/GBP both hit resistance, pointing towards potential downside. Meanwhile, USD/JPY looks set to continue its wider downtrend.

GBP
Source: Bloomberg

EUR/USD turning lower from trendline resistance

The pair has been attempting to break through trendline resistance this morning, with EUR/USD having bounced from the key $1.2334-$1.2323 support zone.

A fall below there would create a double top formation, bringing a bearish outlook for the short term. However, until we break that level, there is always a chance we will push back into the bullish long-term trend. For greater directional confidence, watch for an hourly close above $1.2434 (bullish), or below $1.2323 (bearish).

EUR/GBP hits channel resistance

The price hit the £0.8900 target area this week, with EUR/GBP rallying up to the top of its channel.

This has brought about two successive indecision/reversal candles; a long legged doji, and a shooting star. This raises the likeliness of a reversal lower from here, with traders clearly paying close attention to the descending trendline dating back to early October. Watch out for a potential breakdown from here, with a push above £0.8929 required to signal a bullish breakout.

USD/JPY selling off from trendline resistance

Following the sell-off from trendline resistance last Friday, USD/JPY is moving lower once more this morning.

Given the wider bearish trend in play, there is a strong chance we could see this pair fall back below the ¥108.28-¥108.45 support zone. With that in mind, a bearish outlook is in play, with a fall below ¥108.28 providing greater confidence that this recent retracement phase is over. 

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