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

Sterling and the euro continue to look strong against the dollar, while USD/JPY seems poised to turn lower. 

EUR/USD continues recovery

While caution has set in ahead of the European Central Bank (ECB) meeting, EUR/USD’s steady recovery this week continues.

Yesterday’s pullback from $1.2450 saw buyers emerge around $1.24, and a push through Wednesday’s high would clear the way to a move back to $1.25. An area of support is likely to be $1.2350, but much will depend on what the ECB president has to say.

GBP/USD lower highs remain unchallenged

Here too the buyers have been in control over the past couple of days, but they are soon to confront the downtrend line that has held for GBP/USD since late January.

This sequence of lower highs has yet to be challenged, with a move above $1.3960 required to break the downward progression. A turn lower from here targets the lows from the beginning of the month (around $1.37), with a move below here creating a lower low.

USD/JPY rally wavers

A rally off the lows for USD/JPY yesterday still faltered below the high from the beginning of the week, around ¥106.50.

Further declines will put this downtrend firmly back on the map, targeting the ¥105.25 level. Selling rallies on the four-hour chart has been the way to go here all year, and we would need a move above ¥107.00 to suggest that this may no longer be the case.

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