Dollar eases back in EUR/USD, GBP/USD and USD/JPY
The dollar begins to weaken, yet that move could be temporary for EUR/USD, GBP/USD and USD/JPY.
EUR/USD under pressure within recent rebound
EUR/USD has been attempting to climb back from a sharp decline which took us within close proximity to the all-important 1.1066 level. A break below that point would bring about a confirmation signal that we are heading back into the wider long-term downtrend.
While we have been attempting to regain ground, we have also seen some downside which raises questions over whether this recovery will last. A break below 1.1104 in particular would bring about a more bearish outlook, while a rise back through 1.1147 negates the notion that we could see this market roll over today.
GBP/USD rolling over after rising from support
GBP/USD managed to regain some ground following a decline into trendline resistance this week. A break below the 1.2904 level would certainly provide a more reliable bearish signal for the pair.
Therefore, the question is how we respond to this trendline support, with a break through 1.31 required to bring about a more bullish signal. With that in mind, it is a case of watching for a break through either 1.31 or 1.2904 to gauge where we go from here.
USD/JPY pullback unlikely to last
USD/JPY has drifted lower since Tuesday’s peak, with the pair having surged into a seven-month high after breaking through the key 109.71 resistance level.
That breakout points towards further upside to come, with a break below 109.43 required to negate this bullish picture. As such, this current pullback is seen as a buying opportunity rather than being indicative of a wider reversal coming into play yet.
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