GBP/USD consolidates after sharp sell-off
The pair saw a massive sell-off on Friday, as the fear of a Brexit and a resurgence in the dollar combined to create the perfect storm. Price action is currently consolidating, with a breakout expected to provide directional bias for the short-term.
Given the trend coming into this pattern, another leg lower seems the likeliest eventuality. An hourly close below $1.4158 would provide a likely spark for another move lower, with $1.4090 the next key support level.
Alternatively, an hourly close above $1.4228 would be expected to create a period of upside, with $1.4280 and $1.4299 the next near-term resistance levels.
USD/JPY pushing towards key support level
Thursday's rally in USD/JPY proved short-lived, with the pair breaking to a 40-day low today. The ¥105.55 support level looks likely to be reached before long, which would create a new 20-month low should it occur.
However, for now we are seeing a bounce in USD/JPY as equity markets begin to stabilise. This is likely to be a short-term retracement and thus the Fibonacci retracement levels are worth watching for potential resistance.
As such, we could see short-term upside, yet the long-term downtrend is expected to return to the fold once more in the near future. Key resistance levels are ¥106.29, ¥106.46 and ¥106.63, with support at Y105.74.