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

Dollar weakness is still the driver here, with the euro, pound, and yen continuing to feel the benefit.

Euro and dollar
Source: Bloomberg

EUR/USD tries to bounce back

Having been knocked back from $1.1950 yesterday, we will see whether the bears have the strength to push EUR/USD lower. The first area of potential support is $1.1879.

If this holds, then we look for a move back above $1.1950, and on to the $1.200 area. The area around $1.1850 should continue to provide support, with a close below $1.1836 needed to mark a broader push lower.

GBP/USD still in rising channel

On the one hand, GBP/USD’s failure to hold above $1.3350 is a disappointing development for sterling bulls, with the possibility that, if the price holds below $1.3341, then more downside could be at hand.

In that case, support at $1.3268, and then $1.3153 comes into play. However, the bulls can point to the fact that the pair remains within the upward channel that has held since the lows in mid-November. Thus, we could see a rebound from $1.3300, with $1.3341, and then $1.3383 as initial targets. 

USD/JPY turns lower once more

The decisive rejection by USD/JPY of the attempt to break above ¥111.70 yesterday, speaks to the strength of the selling here. It looks like the rallies will continue to be sold, with the sequence of lower highs and lower lows firmly intact.

The next target would appear to be ¥110.00. A move above ¥111.70, and then above ¥112.00 would likely indicate that the downtrend has come to an end. 

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