EUR/USD, GBP/USD and USD/JPY at risk of another leg lower
EUR/USD, GBP/USD, and USD/JPY are pausing in a position that looks likely to bring further downside.
EUR/USD begins to stall after recent gains
EUR/USD has been regaining ground over the course of the past week, with the price seemingly in retracement mode after declines into a two-year low. That rally seems to be hitting the buffers for now, with the price failing to gain any further traction after hitting the 50% Fibonacci level at $1.0994.
The stochastic is falling below the 80 level, signaling a bearish shift in momentum, yet we would need to see a break below $1.0958 to bring a bearish picture once again. Until then, there is also a chance we are simply seeing a sideways consolidation phase as we await another leg higher. However, ultimately it makes sense to view this as a retracement, with any further upside providing a potential shorting opportunity unless $1.1109 is overcome.
GBP/USD starts to weaken after recent gains
GBP/USD has similarly found the 50% resistance level a difficult hurdle to overcome, with the price drifting lower this morning.
The key here is whether we see a decline below $1.2276 today, with such a move negating the higher lows in existence over the past week. Should that occur, there is a good chance that the recent sell-off comes back into play.
USD/JPY consolidating after double top formation
USD/JPY managed to break below the ¥106.96 low last week, completing a double top formation in doing so.
That provides us with a bearish outlook that is expected to come back into prominence before long. The price is currently consolidating/retracing in a move that looks likely to be a precursor to further downside. As such, these gains are likely to provide a good selling opportunity unless we see the price break through the ¥107.30 level. Such a move would point towards a wider, more protracted rebound coming into play.
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