Dollar strength helps drive USD/JPY higher, while EUR/USD and GBP/USD show signs of weakness
EUR/USD and GBP/USD start to ease back from resistance, while USD/JPY starts to regain lost ground.
EUR/USD eases back from Fibonacci resistance
EUR/USD has respected the 76.4% Fibonacci resistance level this week, with the pair easing back since Monday’s rally into that $1.2116 high.
However, we are stuck within two key thresholds, with a rise through $1.2116 bringing a bullish continuation signal, while a decline below $1.199 would point towards a bearish reversal.
GBP/USD decline continues recent range
GBP/USD has been stuck within the $1.4006-$1.367 range for the past two months, with the pair struggling to gain traction in either direction. That consolidation phase looks to be playing out once again with price turning lower from the $1.4006 peak last week.
With that in mind, there is a good chance we see another move lower from here to extend this range move. Ultimately, it makes sense to expect further rotation between these two extremes until price breaks through one to signal the beginning of a new phase.
USD/JPY breaks resistance to bring wider retracement
USD/JPY has finally broken from its short-term downtrend, with the rise through ¥108.14 bringing a fresh period of upside. That has taken us towards the 200 simple moving average (SMA) resistance. Given the recent break below ¥108.33 support, this current rebound looks likely to be a retracement phase before we turn lower once again.
Whether we end the rally here remains to be seen, but it may make sense waiting for a break below the ¥80.00 threshold on the stochastic as a means to highlight reversing momentum. Until then, there is a good chance we see further upside as the pair continues to build a deeper retracement.
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