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

After a few days of weakness, the dollar is back on the front foot, which has resulted in possible lower highs for EUR/USD and GBP/USD. 

EUR/USD hits 50-day moving average

The rally here has run into the 50-day simple moving average (SMA) at $1.1611, and EUR/USD is encountering some weakness as a result.

However, it has managed to clamber above the zone around $1.155, so this could be a temporary setback. Further gains target the downtrend from the May highs, which would suggest trendline resistance around $1.165. Above here, the $1.175 and $1.185 zones come into view as resistance. A move back below $1.154 would be a bearish development and potentially suggest a move back towards $1.13.

GBP/USD runs into problems around $1.29

Cable’s rally is flagging around the $1.295 area; a failure to recover $1.29 might suggest that a new lower high is in place for GBP/USD and that a move back towards $1.26 is underway.

A push above $1.295 brings the $1.304 level and downtrend resistance from the May highs into view.

USD/JPY hits trendline resistance

USD/JPY is back at the downtrend from the July highs above ¥113.00.

A breakout here would bring ¥111.50 and then ¥112.15 into view as near-term upside targets. If the price falters around trendline resistance, creating a new lower high, then the ¥109.80 support zone is the area to watch, followed by the ¥109.50 area. 

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