The bounce higher in NZD/USD is likely to be sold into, while EUR/USD hesitates at a crucial support level.

Dollar and pound
Source: Bloomberg

EUR/USD indecisive at crucial support level

EUR/USD continues to show indecision at the $1.0819 support level, which represents the double top neckline. A notable close below this level would bring a completion of the double top and thus would create a projected target of $1.017.

The last three four-hour candles have come in the form of hammers, which shows the inability of the pair to sustain any losses. This is to be expected given the significance of this level. However, often a major level will be tested multiple times prior to a break and thus I am not ruling it out.

For now, I am waiting to either see a close below $1.0819 to continue the bearish view, or else a move above $1.087 for a more bullish outlook.

GBP/USD broadening formation likely to continue as it bounces higher

The $1.555 support level has held up yesterday, providing a bounce back towards the middle of the broadening formation that has been in play for a week now. With the MACD histogram rising, there is a clear sign that we could see a bullish bias take hold today.

Ultimately the pound looks like it is in a temporary consolidation phase and thus I expect us to move higher from this formation rather than move lower. With that in mind, I am bullish unless price moves below the descending trendline and in particular the $1.5447 support level.

The near-term resistance comes in at $1.567 for GBP/USD, which would need to be broken for us to see another move higher.

NZD/USD at crucial resistance point and looking bearish

NZD/USD has been rising so far this week, yet given the clear downtrend in play, coupled with a major resistance point, I believe we will see selling resume soon. The descending trendline dating back to 10 June has also coincided with the 7 July support level of $0.662 and so far this has provided resistance as seen by the current doji being formed.

Thus I am bearish and think it is likely to see selling take hold below $0.662. My bearish view would only be invalidated above $0.677.

USD/JPY breaks through resistance and continues to rise

USD/JPY has been climbing gradually higher, with volatility falling yet direction clearly defined. The move above ¥124.38 is crucial as this represents the 24 June swing high. As such, I am hoping to see price remain above ¥124.38 as new support for another leg higher.

Given the Bollinger band squeeze and low volatility, I would expect to see a pickup in volatility soon. My bullish bias remains in place unless price moves below ¥123.92, yet I would also be aware of ¥124.23 as a possible support level prior to that.  

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