EUR/USD and GBP/USD likely to decline as USD/JPY breaks resistance

EUR/USD and GBP/USD expected to turn lower, as USD/JPY breaks resistance to bring bullish reversal signal.

EUR/USD continues to drift down towards key support level

EUR/USD continues to grind lower, with the pair losing traction as money flows back into those currencies that could benefit from monetary tightening in the coming months.

Price has pushed up towards trendline resistance once again overnight, bringing expectation of another move lower today. Ultimately, a break back below the $1.1235 level would be required to end the recent upward phase, building greater confidence in a continuation of the wider bearish trajectory.

GBP/USD expected to weaken after tentative gains

GBP/USD has rallied up into trendline resistance overnight, with the pair failing to gain traction starting to lose traction in the early hours of this morning.

The intraday trend of lower highs does signal a likely bearish turn from here, with a rise through $1.331 required to bring a more positive short-term outlook. Until then, this pair looks likely to turn lower once again.

USD/JPY breaks through resistance to bring bullish outlook

USD/JPY has managed to break up through the ¥113.61 resistance level overnight, bringing about a bullish signal after a period of weakness for the pair. That recent decline into trendline support came after markets considered the dovish implications for the Federal Reserve (Fed) if Omicron turned out to result in global lockdowns.

However, tentative signs of optimism over the mild effects of the Covid-19 virus have helped lift sentiment for this pair. Keep an eye out for future Omicron announcements to impact sentiment for the Fed and thus USD/JPY. This break up through ¥113.61 brings us a fresh bullish outlook, with a recovery of the late-November losses looking

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