EUR/USD, GBP/USD, and USD/JPY continue to be driven by dollar strength
Dollar strength remains a key factor for FX markets, with EUR/USD, GBP/USD weakness coupled with sharp USD/JPY gains.
EUR/USD declines unlikely to end here
EUR/USD continues to lose ground as traders favour the dollar and the US recovery story. The current candle highlights a stabilization that is occurring, yet upside is likely to be short-term in nature.
Immediately above we have a dashed trendline, with a break through that point required to bring a wider retracement into play. Should that occur, we have the confluence of a wider descending trendline and the $1.1805 swing-high to contend with. Thus, until we start taking out key resistance levels such as $1.1805 and $1.1947, any near-term upside looks to be a potential selling opportunity for EUR/USD.
GBP/USD attempting to regain ground from Fibonacci support
GBP/USD is regaining ground from the 76.4% Fibonacci support level this morning ($1.3711). The wider uptrend certainly comes under greater pressure if we see the pair fall back below the $1.3566 swing-low, with things seemingly stabilizing for now.
As such, whether we attempt to rebound from this Fib level or break below $1.367 should give us a good idea of where we go from here. With the stochastic moving up through the 20 threshold, there is a good chance we could see short-term gains to steady the pair around a new area of consolidation.
USD/JPY surge breaks key resistance levels
USD/JPY has been surging higher over the course of the past week, with the latest move higher taking price up through a confluence of the 200-week simple moving average SMA, 76.4% Fib resistance, and the June 2020 peak of ¥109.85.
From a long-term perspective, we are still in a downtrend, with a break up through the ¥112.23 level required to end that. However, the recent break through that cluster of resistance goes a long way in telling us that we could be on course to ending the multi-year downtrend.
The four-hour chart highlights this impressive drive higher, with further gains looking likely. A decline through ¥109.37 would point towards a wider pullback coming into play. However, further upside does look likely from here, with any short-term pullback looking like a buying opportunity.
This information has been prepared by IG, a trading name of IG Markets Ltd and IG Markets South Africa Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.
Start trading forex today
Trade the largest and most volatile financial market in the world.
- Spreads start at just 0.6 points on EUR/USD
- Analyse market movements with our essential selection of charts
- Speculate from a range of platforms, including on mobile
Live prices on most popular markets
- Forex
- Shares
- Indices
Prices above are subject to our website terms and agreements. Prices are indicative only
