EUR/USD, GBP/USD and USD/JPY all under pressure

Risk aversion is still being felt across forex markets, with little upside for the euro and sterling against the dollar.

EUR/USD weakens again

The EUR/USD price has continued to fall, with no sign yet that a bottom is definitely in, although a possible bullish wedge may have formed.

A rally above $1.10 would help to suggest that the wedge formation has resolved in favour of a move higher, potentially targeting $1.117. Alternatively, a drop below $1.101 revives the downward move and brings $1.099 into play, followed up by $1.088.

GBP/USD still under pressure

Intraday rallies have been short-lived so far, as the GBP/USD price continues to fall.

The next stop appears to be $1.2975, support on 14 January and 20 January, while below this at $1.2955 rising trendline support from August comes into play. Bulls need to break above $1.317 to provide a more optimistic outlook.

USD/JPY struggles around ¥109.00

USD/JPY managed to hold its ground yesterday after the gap lower, but a sudden drop back below ¥109.00 may signal that more downside is to come.

The failure to close the gap is a potential bearish development, with confirmation of this coming with a move below ¥108.70. This would then open the way to ¥107.90 and the lows from early January. Since 22 January, gains have been contained by the 50-hour simple moving average (SMA) at ¥109.14 and so a move above this would be a first step in building a more bullish view.

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