EUR/USD, GBP/USD and USD/JPY all come under pressure
Risk aversion has gripped markets, and is being felt in forex markets as the euro and sterling weaken against the dollar.
EUR/USD drifts lower
There is no definite sign that EUR/USD will begin even a brief rebound, but it is true that the straight line decline since the beginning of February has slowed, with the price barely eking out a new lower low yesterday.
A short-term bullish wedge seems to have formed, with a move above $1.084 and through $1.085 sending the signal that some near-term upside is possible. Alternatively, a fresh decline through $1.082 would revive the downward move.
GBP/USD creates new lower low
A possible turn lower in GBP/USD seems to be at hand, as the price continues to decline after topping out at the end of last week at $1.305.
Having fallen below Friday’s low at $1.30, the price has broken the sequence of higher lows, and may now continue to decline, targeting $1.295, $1.29 and then $1.287. Alternatively, a recovery above $1.30 revives the bullish view.
USD/JPY turns down again
The USD/JPY price continues to come under pressure, although it has so far avoided a move below ¥109.55 and the lower bound of the recent range.
However, trendline resistance from the June 2015 high capped gains last week, and yesterday’s bounce ran out of steam at ¥110.00. Therefore, we wait for a break out of these levels to define the next bigger move.
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