EUR/USD and GBP/USD break lower, as USD/JPY look to break higher
EUR/USD and GBP/USD expected to continue their downward trajectory, as USD/JPY shows signs of an impending bullish breakout.
EUR/USD slumps into 19-year low
EUR/USD has been hit hard of late, with the dollar continuing to benefit from risk-off sentiment and expectations of a sharp jump in US interest rates. The recent decline through $103.4 brought about the lowest reading since 2002. Unfortunately for the euro, we see few reasons to be bullish as price heads towards parity.
A push up through the $104.89 level would bring about a more positive outlook. Until then, any near-term gains represent opportunities to sell into this downtrend.
GBP/USD expected to continue its decline
GBP/USD has similarly been on the back-foot, with price hitting a two-year low yesterday. While we are seeing price consolidate somewhat since the Tuesday decline, we are yet to see anything that would inspire confidence for bulls.
As such, bearish outlooks remain preferable until we see price break up through the $1.2165 swing-high.
USD/JPY looks primed for another break higher
USD/JPY has enjoyed a dramatic rise over the course of 2022 thus far, and we look likely to see further upside to come. The consolidation seen over the course of the past two-weeks could be set to come to an end, with price heading up through trendline resistance. A push up through the ¥136.36 level would bring about a potential breakout signal, pointing towards an impending leg higher.
There is also a risk that we simply continue to trade within a sideways pattern, and thus it is worthwhile noting the importance of the ¥137.00 handle as a breakout indicator. A decline through the ¥134.74 level would be required to signal a more pessimistic short-term outlook.
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