EUR/USD, GBP/USD and USD/JPY ease back on recent moves
Dollar strength is expected to return before long after varied moves for EUR/USD, GBP/USD and USD/JPY.
EUR/USD consolidates after recent gains
EUR/USD has managed to find some buyers after recent declines, with the pair rising through the $1.0821 swing high to bring a more bullish short-term view. The upside seen yesterday took the price through the $1.0863 resistance level to continue the recent trend of higher highs.
Thus, the consolidation we are currently seeing is likely to be a retracement before we move higher once again. This bullish outlook holds unless we break below the $1.0805 support level. However, it is worthwhile noting that this short-term bullish outlook does not negate the wider long-term downtrend that is expected to kick in before long.
GBP/USD losses expected to return despite short-term gains
GBP/USD has seen some upside over the past 24 hours, with the price seemingly forming a higher low despite recent declines from the 61.8% Fibonacci level. A break through that $1.2985 level would point towards a potential rise into the 76.4% retracement at $1.3018.
However, in either case it looks likely we will continue the declines seen over the wider two-month period. A break through $1.307 would be required to negate this bearish outlook.
USD/JPY pullback unlikely to last
USD/JPY has been on an incredible journey over the past week, with sharp gains being greeted by equally steep declines yesterday. Nonetheless, the wider uptrend seen throughout the past six months remains in play, with the price appearing to retrace some of last weeks gains.
The Japanese economic and health-related fears remain significant, and thus it is likely that the dollar will provide the more reliable haven unless we start seeing the virus make a significant impact upon the US. With that in mind, the current decline looks like a retracement of the rally from ¥109.66, as highlighted on the four-hour chart below. While the price is heading lower, it is likely that this will be a short-term move before the bulls start to come back into play. A break below the ¥109.66 level would negate this bullish outlook.
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