EUR/USD, GBP/USD, and USD/JPY see countertrend moves on dollar weakness
The dollar has been on the back foot over the post-FOMC period, with EUR/USD, GBP/USD, and USD/JPY enjoying counter-trend moves as a result.
EUR/USD regains ground, but remain within consolidation zone
EUR/USD has been on the rise as the dollar loses traction towards the back end of the week. The latest Federal Reserve (Fed) meeting brought some hope that we could see the rate of hikes slow, which in turn took some steam out of the dollar. Whether that will continue remains to be seen.
For now, we are seeing the price rise towards the top end of the recent consolidation phase, with a rise up through the $1.0278 required to signal a potential impending leg higher coming into play. However, with 200 simple moving average (SMA) and trendline resistance up ahead, the wider downtrend is likely to kick in once again at some point. A break through the $1.0615 swing-high would be required to bring an end to that wider bearish trend.
GBP/USD rises into 76.4% resistance level
GBP/USD has been outperforming over the course of the week, with price managing to push back into a fresh six-week high this morning. While that will embolden many, it is worth noting that the wider bearish trend does remain play. With the price having pushed into the 76.4% Fibonacci resistance level, there is a chance we start to see the bears come back into play from these levels.
As such, a move back below $1.2103 or above $1.2254 would bring about a better idea of where we go from here. However, even if we do see a push through $1.2254, the wider bearish trend remains in play unless price breaks the $1.2406 swing-high.
USD/JPY tumbles through support to bring wider retracement into play
USD/JPY has similarly seen dollar weakness playing out over the course of the week, with the price breaking back below the ¥134.74 support level. The subsequent capitulation in price has brought about a move towards the confluence of 61.8% Fibonacci and horizontal support around ¥131.49.
This highlights how a wider bullish trend should kick in once again before long. With that in mind, watch out for potential support around the 61.8% and 76.4% Fibonacci levels within this current selloff.
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