CFDs are complex instruments. You can lose your money rapidly due to leverage. Please ensure you understand how this product works and whether you can afford to take the high risk of losing money. CFDs are complex instruments. You can lose your money rapidly due to leverage. Please ensure you understand how this product works and whether you can afford to take the high risk of losing money.

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.

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