EUR/USD, GBP/USD and NZD/USD weakening as the dollar starts to strengthen
EUR/USD, GBP/USD, and NZD/USD drift lower, but will this dollar resurgence last?
EUR/USD rolls over into crucial support level
EUR/USD has been reversing some of its recent gains, with the pair weakening from around the 76.4% Fibonacci resistance level of $1.2116. Interestingly, we have now broken from an ascending channel, with the decline through $1.2056 also ending the trend of higher lows.
The price has subsequently been building on that bearish signal, with the notable level of $1.199 currently being challenged. A move below this point brings a continuation of that current bearish trend that has been building. To the upside, a rise through $1.2076 would be required to bring a more positive outlook for the pair.
GBP/USD continues to consolidate as we await breakout
GBP/USD has been in consolidation mode over the course of the past two-months, with the pair showing few signs of breaking from that $1.367 to $1.4006 range anytime soon.
Within that range, we have recently seen the pair channeling lower, with the 61.8% Fibonacci level providing support on Friday. This highlights the potential inverse head and shoulders pattern coming into play throughout this two-month period.
With that in mind, the recent decline looks likely to be a precursor to us breaking higher. However, we would ultimately need to see a break through $1.367 (bearish) or $1.4006 (bullish) to bring a more confident breakout signal for the pair.
NZD/USD fails to sustain jobs bounce
NZD/USD saw a brief bout of gains off the back of an impressive jobs report overnight. However, that move failed to hold for long, with the pair starting to turn lower after confronting a descending trendline.
The recent bearish reversal seen for the pair highlights a potential for further weakness from here. Interestingly, this recent bounce provided the third touch of a now confirmed ascending trendline, which could become support as we move lower. Nonetheless, further downside looks likely unless we break through $0.7212, with the pair expected to drift lower as we move forward.
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