Dollar downside coming back into play for EUR/USD, GBP/USD and USD/JPY
Dollar downside looks likely to return once again, with EUR/USD, GBP/USD, and USD/JPY all starting to reverse after the latest retracement.
EUR/USD turning higher after 76.4% retracement
EUR/USD is on the rise following a retracement into the 76.4% Fibonacci retracement level.
The recent rally through $1.1832 provided a bullish signal for the pair, with the latest pullback looking like a retracement within that move. As such, further upside looks likely from here as we build on the bullish reversal break.
GBP/USD pullback likely to provide buying opportunity
GBP/USD is also attempting to reverse higher after a decline which has taken the pair towards the 50% retracement level.
While the size of that retracement does highlight the potential for a deeper pullback coming into play, it makes sense to watch out for a bullish resurgence before long. That bullish outlook holds until we see a break below the $1.2911 level.
USD/JPY expected to decline further after recent rebound
USD/JPY has been attempting to regain ground following a sharp decline that completed a bearish head and shoulders formation.
That short-term bearish pattern, coupled with the wider long-term downtrend, highlights the likeliness that we will continue to move lower from here. With that in mind, further downside is expected, with a bearish outlook in play unless we see a break through the ¥105.74 level.
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