GBP/USD retracing Friday’s gains
GBP/USD managed to regain some ground on Friday, following a sharp deterioration in the early part of last week. Crucially, we have not broken through the $1.2308 resistance level yet, thus bringing about the chance of further downside.
That said, with EUR/USD breaking higher in such a convincing manner, it may be a matter of time before we see this pair push through $1.2308 too. Should that occur, then we could be looking at a bullish phase for this pair. However, until then, the short-term downtrend remains valid.
USD/JPY pulling back from deep retracement
USD/JPY is selling off sharply following Friday’s top, which saw yet another very deep retracement, rallying through the 76.4% pullback. However, with price falling short of the ¥114.96 level, there is a good chance we will see a fairly prolonged period of weakness at the beginning of the week.
With that in mind, watch out for further downside. As the price failed to break below ¥111.60 last week, there is a potential for a wider bullish reversal in play, which would point towards this sell-off perhaps failing to break back below ¥111.69.