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

The dollar has been in decline, with GBP/USD and EUR/USD strength coupled with a weaker USD/JPY. However, with key levels ahead, the Fed’s outlook this evening will likely set us up going forward.

EUR/USD rallies through notable swing high

EUR/USD has once again muddied the water, with the rally through $1.1393 providing a new higher high to negate the lower low formed with the break below $1.1305.

That provides a potential bullish phase coming into play, which will likely be determined by affairs at the Federal Open Market Committee (FOMC) later today. Watch for a break through the $1.1443 level to confirm the more bullish view that is building with the break above $1.1393.

GBP/USD rally takes us back above 61.8% resistance

Once again, GBP/USD rose into the 61.8% level, with the pair looking to have made an ABC three-legged retracement of the decline from $1.2912.

A rally through that swing high would point towards a likely period of upside. Until then, there is a good chance that we will see the pair turn lower once more.

USD/JPY hits trendline support

USD/JPY has declined off the back of the 76.4% retracement, with a head and shoulders ultimately driving a decline in the pair towards the ¥112.23 swing low.

That has also seen the descending trendline come into play, raising the possibility of a rebound from here. Much of it will come down to the FOMC dot plot later today. Until then, there is a chance we will consolidate above trendline support.

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