Countertrend moves appear to be in the offing, with the US dollar suffering. However, this seems unlikely to last given the long-term outlooks.

Japanese and American flags in the foreground
Source: Bloomberg

EUR/USD resurgence unlikely to last

EUR/USD has been regaining ground over the past two days, following the wedge breakout we were discussing on Wednesday. While we have set a new higher low, the pair has yet to retake the $1.0641 resistance level, which also coincides with a descending trendline. Ultimately, despite this resurgence, a close back above $1.0689 would be needed to regain any sort of bullish tone and until then, the bearish outlook remains dominant. Support levels in view are $1.06 and $1.0565. 

GBP/USD consolidates in triangle

GBP/USD has been consolidating over the past two days, following a strong downtrend earlier in the week. The breakout from this pattern is going to set direction, and given the trend coming into this formation, the bearish view still dominates. However, a close above $1.5128 would provide a more bullish view, where $1.5137 and $1.5155 represent the next resistance levels. A close below $1.5066 would confirm the bearish view, with $1.5053 and $1.5027 the next support levels to watch.

EUR/GBP breaks higher

EUR/GBP saw Tuesday’s burst higher come undone on Wednesday. Yet we have since seen the pair gradually move higher since. This seems likely to continue in this same groove unless we break back below £0.7015. With the momentum indicators pointing towards some form of pullback, there is a good chance we could see a retracement lower this morning, yet until we break £0.7015, the bullish view is set to remain for the short term. Resistance levels of note are at £0.7053 and £0.708. While support levels to watch are at £0.7026, £0.7015 and £0.7.

USD/JPY back at key support level

USD/JPY has pulled back to the ¥122.30 support level, which has been the source of multiple bounces in the past. As such, this is taken as the key axis that the day’s outlook is based upon. Given the inability to break it in the past, another bounce higher seems the likeliest resolution. Yet a close below ¥122.25 would provide a bearish outlook. Resistance levels of note are at ¥122.41, ¥122.50 and ¥122.62. Meanwhile, support levels to watch are at ¥122.30, ¥122.25 and ¥122.00.

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