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EUR/USD, GBP/USD and USD/JPY see haven demand

A mixed bag for EUR/USD, GBP/USD, and USD/JPY, with haven demand playing out after Trump contracts coronavirus.

EUR/USD rolling over after recent retracement

EUR/USD has started to turn lower, with the wider risk-off sentiment driving upside for the haven dollar. Given the breakdown seen last week, this recent rise is likely to represent a retracement before we turn lower once again.

The rally took us back towards the 61.8% Fibonacci retracement level ($1.1772), and we are starting to decline from there. A break through the $1.1684 swing low would establish a more reliable sell signal here, highlighting the likely end of this recent upward retracement phase. Until then, there is still a chance of a deeper move towards the 76.4% Fibonacci level. However, in either scenario, a bearish outlook is in play unless we see the pair rise through the $1.1871 swing high.

GBP/USD rallies as hopes of Brexit deal are lifted

GBP/USD has rallied after the news that UK Prime Minister Boris Johnson and the EU’s President Ursula Gertrud Von Der Leyen are set to hold high level talks on Saturday in a bid to break the deadlock.

From a charting perspective, the downtrend seen over the past month remains in play until we see a break through the $1.3007 level. As such, the bias will be determined by whether we break $1.3007 (bullish), or $1.2805 (bearish).

USD/JPY breaks lower as yen dominates haven demand

USD/JPY has moved sharply lower, with the wider bearish trend seemingly coming back into play once more. While the pair had been gaining ground over the course of the past fortnight, the long-term downtrend seen throughout 2020 always looked likely to kick in before long.

On this occasion, we have seen the pair reverse from the 61.8% Fibonacci retracement level following a move into haven assets this morning. While the pair is attempting to regain some of that lost ground, it is likely we move lower from here, with a bearish outlook in place until we see a rise through the ¥105.73 swing high.

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