Daily Forex Analysis: The Yen Sets a 3 Week High

USD/JPY:

The U.S. Dollar (USD) is now at its lowest level in over three weeks versus the yen (JPY). This is why taking a long position has not been favorable. We are now testing a key support level neat 101.80 and even touched a low near 101.50 before recovering a bit. A break below that level can test the next significant support at 101.40.

Should the USD/JPY defend at 101.80 and move higher, we would look to test the resistance near 102.20/30 congestion area with a break there testing 102.50 then 102.60. The MACD is above the signal line and it looks we are still in a medium to long term consolidation pattern.

EUR/USD

The Euro (EUR) has lost value versus the U.S. Dollar (USD). This was not expected as we have been struggling to rise above the 200 moving average (MA) for some time. We saw a hammer form which provided a recovery higher but we remain stuck in a bearish trend.

Should we break above 1.3420 could lead to a recovery testing 1.3470 to 1.3475 congestion area. However, a pullback at this current level could reopen the doors for 1.3335 then 1.320.

GBP/USD

The Sterling (GBP) has hit a wall and been falling ever since. The yearlong bullish run has ended versus the U.S. Dollar (USD). The GBP/USD formed a hanging man formation near 1.7176 and lost ground. The RSI went into a negative convergence at this point, which did not encourage buyers to stick around.

We are now looking to test the key support near 1.6740. A move below this level will open the gates to retest 1.6700 and lower. The RSI is once again turning negative, which could indicate a recovery near these levels. Should this happen, a move above 1.6800 will open the doors for 1.6830.