Dollar weakness expected for GBP/USD and USD/JPY
Dollar weakness looks to be on the cards, with GBP/USD gains likely to be joined by USD/JPY weakness. Meanwhile, EUR/USD looks primed for a breakout.
EUR/USD closing in on triangle apex
EUR/USD failed to break into a new higher high yesterday, instead reversing lower to continue the symmetrical triangle formation that has been building.
With the price having now declined into trendline support, we are approaching the apex of this formation. As such, watch for whether we break through $1.1038 or $1.1075 to provide a signal of where we go from here.
GBP/USD pushes higher to continue uptrend
GBP/USD managed to push higher once again yesterday, following on from a 61.8% Fibonacci retracement.
The uptrend remains intact, with the Federal Reserve (Fed) rate cuts coupled with easing fears of a no-deal Brexit providing the pound a boost. That is likely to continue, with any short-term downside likely to bring about a new buying opportunity. As such, a bullish picture remains unless price break below $1.2435.
USD/JPY starting to weaken from trendline resistance
USD/JPY has started to weaken after a rally into trendline resistance, with the price falling into the 61.8%-76.4% Fibonacci zone. The wider long-term trend remains bearish and thus it is likely the pair will soon reverse lower once again.
Given the rally into this trendline, there is a good chance that market top is upon us. However, it makes sense to await a breakdown below ¥107.50 for that bearish confirmation signal. Until then, there is still a chance that we could continue the short-term uptrend.
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