EUR/USD, GBP/USD and USD/JPY head lower after central bank volatility
This week has seen risk-off sentiment dominate the FX market, with EUR/USD and GBP/USD falling back towards Fibonacci support. Meanwhile, the USD/JPY downtrend looks to finally kick in once again.
EUR/USD turns higher from Fibonacci support
EUR/USD has managed to maintain its consistent uptrend despite the central bank fuelled volatility seen over the course of this week.
Today brings a final hurdle to overcome in the form of the US jobs report, with the last pullback bringing a potentially advantageous location to look for longs in EUR/USD. With the price having dropped into a deep Fibonacci retracement level over the course of the past 24 hours, this is a notable area where the bulls could come back in to maintain the bullish trend.
With that in mind, long positions remain in favour unless we see the price fall back below the $1.0802 swing low.
GBP/USD reverses back towards Fibonacci support
GBP/USD has been hit hard over the past 24 hours, with the pound particularly coming under pressure in the back end of this week. While that decline has been relatively convincing in terms of momentum, the wider bullish trend remains in play.
The pullback into the 76.4% Fibonacci support level of $1.2172 highlights the potential for a bullish turnaround from here. As such, keep an eye out for how the pair respects this Fibonacci level, with a break below that point signalling the potential for a continuation of this decline towards the key $1.2086.
Meanwhile, watch out for a move up through the 80 threshold on the stochastic oscillator as a signal that the bulls are coming back into dominance.
USD/JPY breakdown points towards further downside
USD/JPY has finally given way after a period of consolidation that took the price up towards trendline resistance.
The ability to maintain that wider bearish trend brought expectations of another leg lower, which appears to be in the offing. The decline through $1.2902 support brings an end to the recent trend of higher lows seen earlier this week.
As such, we appear to have set in motion a potential fresh bearish phase, with a negative outlook holding as long as the price does not rise up through the $1.3055 resistance level established on Monday. Until that happens, the bears look likely to remain in charge.
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