EUR/USD, GBP/USD and USD/JPY start to reverse recent dollar strength
Dollar gains start to come under pressure, with EUR/USD and GBP/USD turning upwards as USD/JPY rolls over.
EUR/USD finds support on inside trendline
EUR/USD has managed to stabilize despite yet another reminder from Jay Powell that he plans to raise rates further in the wake of an impressive payrolls figure on Friday. The recent decline has brought about plenty of calls for a top in EUR/USD, but the daily timeframe highlights how this recent move does still remain within a wider uptrend for now.
With the ascending inside trendline and 61.8% Fibonacci support coming into play here, another rebound remains a distinct possibility. Conversely, a move back down below this zone would signal the potential for a continuation of this recent sell-off. Ultimately, we would need to see a break below the $1.0483 swing-low to signal an end to this four-month uptrend.
GBP/USD turns upward from Fibonacci support
GBP/USD has similarly been under pressure of late, with the price hit hard in latter part of last week. However, we are yet to see the double top formation complete with a break below $1.1841. Instead, the price has started to turn upwards from the confluence of trendline and the 76.4% Fibonacci support level.
Once again, this highlights the potential for a bullish reversal from here, with a break back below the $1.1841 support level required to reestablish the bearish theme that has been playing out over the short term.
USD/JPY reversing after latest upward retracement
USD/JPY has started to fade the strength seen in the wake of Friday’s US jobs report, with the push up into the 76.4% Fibonacci retracement level at ¥132.99 coming under pressure. The wider downtrend seen over the course of the past three months does remain intact despite calls for a dollar reversal, with a move up through ¥134.77 required to bring that bullish view into play.
Until then, the recent rise looks to have provided another selling opportunity, with yesterday's decline serving to complete a bearish engulfing candlestick pattern that points towards further downside from here.
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