Dollar strength continues to drive EUR/USD, GBP/USD and USD/JPY
EUR/USD, GBP/USD and USD/JPY continue to trade on dollar strength, with markets now turning their eye to the US jobs report.
EUR/USD breaking lower
EUR/USD has dropped into the 76.4% Fibonacci support level this week. However, despite initial support found yesterday, we are seeing another break lower this morning that could signal a possible bearish reversal coming into play.
The downtrend seen over recent years does highlight a likely breakdown before long. However, we have to await a break below the $1.1067 low to confirm the end of this recent uptrend. As such, with the price breaking lower, keep an eye out for whether we see a decline below the $1.1067 level as a guide on where we go from here.
GBP/USD falls back, yet Fibonacci is in sight
GBP/USD is easing back once again this morning, following on from a move higher yesterday. The decline seen throughout the past week could be a retracement, given the respect of the 61.8% Fibonacci level last week.
With that in mind, the current trend of lower highs could take us into another leg lower and a move into the 76.4% retracement at $1.2994. While the short-term outlook is bearish, the impending US jobs report is likely to provide volatility. Thus, watch for whether we break either $1.2905 or $1.3212 as a signal of where we go in the medium term.
USD/JPY rises back into key resistance level
The USD/JPY resurgence has taken us back towards the December peak of ¥109.71, with the price now trading around a wider trendline resistance.
That signals a potential reversal point, but also a possible breakout coming into play. With that in mind, watch out for whether we see a break above ¥109.71 (bullish), or below ¥109.32 (bearish) to highlight where we go from here.
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