FX levels to watch: EUR/USD, GBP/USD and USD/JPY
Dollar strength helping drive EUR/USD and GBP/USD lower, yet despite a BoJ rate cut, we have seen the yen outperform overnight.
EUR/USD breaking below Fibonacci support
EUR/USD has been declining throughout the past week, with the price falling below the 76.4% Fibonacci retracement level at $1.124.
The ability to remain below that support level will be key to building a more bearish picture. However, this could be an important turning point if we start to gain ground from here. Given the break through $1.142 last week, there is a good chance we are seeing a retracement before we push higher once more. Watch for a break through $1.1285 to provide greater confidence of a bullish move coming into play.
GBP/USD moves lower after failed indicative votes
This break below $1.3159 points towards downside coming into play, with another higher high looking likely. Until the pair breaks through either $1.3004 or $1.327, it looks likely that we will continue to see price tighten as we await a breakthrough or breakdown in the Brexit outlook.
USD/JPY breaking lower despite BoJ rate cut
USD/JPY is looking set to continue the recent downtrend, with an overnight rate cut from the Bank of Japan (BoJ) doing little to devalue the yen.
Given the downtrend in place since the symmetrical triangle breakdown, this 76.4% retracement looks likely to bring another leg lower for the pair.
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