Dollar expected to weaken in EUR/USD, GBP/USD and USD/JPY
Dollar expected to come under pressure once more, with EUR/USD, and GBP/USD strength likely to be joined by USD/JPY weakness.
EUR/USD starts to turn higher after overnight declines
EUR/USD has kicked off the week on a somewhat negative tone, with the pair moving lower to give back some of the gains from last week. With the price failing to break beyond the $1.0921 support level thus far, there is a good chance we could resume the recent bullish trend once more from here.
Watch for a break through the 20-mark on the stochastic to provide a signal that momentum is truly gaining on the bullish side of this trade. A break below the $1.0921 level would negate this bullish outlook and signal a wider pullback coming into play.
GBP/USD pullback could bring bullish reversal
GBP/USD declines seen throughout the final day of the week appears to have set us up for another move lower today, with the price gapping lower and declining into the 200-hour simple moving average (SMA). However, the recent uptrend remains intact given the failure to break below $1.2389 thus far.
With that in mind, there is a good chance we will start to see the bulls come back into play from here, with a break through 20 on the stochastic providing a bullish signal. Conversely, a break below $1.2369 would negate this bullish outlook.
USD/JPY regaining ground, yet wider bearish trend remains
USD/JPY is starting to regain ground following a period of declines for the pair. With the wider outlook clearly bearish, there is a good chance that the current consolidation is a precursor to further downside.
Nevertheless, if we see the price break through the ¥106.93 level, we could be looking at the heightened likeliness of a wider rise coming into play. Until then, there is a good chance of a move lower, with a break below the ¥106.60 level providing greater confidence of that bearish move coming into play.
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