EUR/USD and GBP/USD gains ease, while USD/JPY breaks support

Dollar weakness has seen EUR/USD and GBP/USD rise, while USD/JPY weakens. Can these moves persist or will the Fed help bolster the greenback?

EUR/USD comes under pressure from Fibonacci resistance

EUR/USD managed to surge into the 61.8% Fibonacci resistance level yesterday, in a move that broke out of the hourly trend and instead seems to have kicked off another wider retracement as evident on the four-hour chart. That wider trend of lower highs remains in play unless we see a break through the $1.0991 peak from mid-April.

Given the respect of the 61.8% Fibonacci retracement ($1.089), there is a chance we could simply head lower from here, with a break below $1.0809 adding credence to that idea. However, there is also a possibility we could rise into the 76.4% retracement at $1.0923. In either case, a bearish outlook is in play unless we see a break through $1.0991.

GBP/USD continues its ascent, but resistance lies ahead

GBP/USD has been on the rise since finding Fibonacci support at $1.228 last week. With that pair moving into a deep retracement zone, there is a possibility we could see some downside if the price starts to break from this current intraday rise.

As such, a break below $1.2404 could start to see the pair reverse lower once again. Until then, it’s a case of seeing whether this rally has enough juice left to break through the 76.4% level or not. Should that occur, we could be looking at a continuation break through $1.2647.

USD/JPY breaks into fresh one month lows

USD/JPY managed to break below the crucial ¥106.92 support level yesterday, bringing a new one-month low. That is likely to bring further downside before long.

With the directional bias now clearly established, bearish positions are preferred. A short-term rise is possible given recent declines, yet a bearish outlook remains in play irrespective of whether that happens or not. A break through the ¥108.08 level would be required to negate this bearish outlook.

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