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

Dollar strength has abated slightly, but overall the greenback’s rally continues to hit key currency pairs.

EUR/USD returns to key support

EUR/USD is now testing the crucial support zone around $1.22 that has held since the middle of January.

Below $1.2165, the $1.2092 level comes into play. A rally will target the $1.24 area, and a push above here would break the sequence of lower highs seen on the four-hour chart since mid-February.

GBP/USD still hit by Carney’s dovishness

There has been little stopping GBP/USD on its downward move over the past week, but with UK data drying up we may see a slowdown in the rate of descent.

It has fallen below the low from 5-6 April, around $1.40, but with momentum so heavily oversold on the four-hour chart a rebound is possible. Above $1.3943, the pair targets $1.4070 and $1.4145 in the near term. Further declines will target $1.3836.

USD/JPY flies higher

USD/JPY has enjoyed its first sustained rally in weeks, reaching the 100-day simple moving average (SMA) for the first time since the middle of January.

The next upside target comes in at ¥110.50. The price has become overextended in the short term, which could result in a retracement towards ¥107.50. 

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