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Dollar coming back into strength, reversing recent EUR/USD, GBP/USD and USD/JPY moves

The dollar has come under pressure over the past week, yet those countertrend moves look likely to resolve back the direction of the trend for EUR/USD, GBP/USD, and USD/JPY.

EUR/USD starts to roll over after period of gains

EUR/USD has started to show signs of weakness, following a period of gains that took the index up into the 100-day simple moving average (SMA) resistance level. However, the wider trend remains bearish for this pair, pointing towards a potential reversal coming into play before long.

While we are seeing price head lower here, it is likely that we see consolidation take hold ahead of the potential volatility associated with this afternoons European Central Bank (ECB) meeting. Nonetheless, we should be aware that a move back below $1.0119 would bring greater confidence of a bearish turn for the pair. To the upside, be aware of the confluence of trendline, Fibonacci and SMA resistance to contend with.

GBP/USD heading lower as dollar strength comes back into play

GBP/USD is also on the back foot in early trade today, with the dollar clearly finding its feet again after a retracement period.

The wider trend remains bearish for this pair, thus pointing towards another selloff coming sooner-or-later. Thus, it is worthwhile watching for a potential break back below the $1.1925 level to bring greater confidence in the bearish side of the coin. On the flip-side, even if we did see another move higher, it would likely simply take us into a deeper upward retracement before the bears come back into play.

USD/JPY bulls back in charge after pullback

USD/JPY provided us with a welcome retracement back into a confluence of Fibonacci and trendline support this week. Unlike the Federal Reserve (Fed), the Bank of Japan (BoJ) have few inflationary concerns as things stand.

The BoJ overnight decision to hold off on any monetary policy adjustments overnight highlighted exactly that. Thus, we look likely to continue seeing gains for the pair as the interest rate differential grows to benefit the US dollar. A break back below the ¥1.3647 swing-low would bring about a more bearish outlook for the pair. However, until that happens it is likely that we will see another bout of gains come into play for USD/JPY.


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