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EUR/USD and GBP/USD driven lower, while USD/JPY regains lost ground

Dollar strength sees EUR/USD and GBP/USD head lower, while USD/JPY starts to regain ground.

Transcript

EUR/USD looks primed for further downside

EUR/USD has been trending lower over the course of June and July, with the pair seemingly on course for another lower low in the coming days.

The latest rebound provided us with a 61.8% Fibonacci retracement, with the price heading lower since. With that in mind, further downside looks likely here and a bearish view holds unless $1.1884 is broken.

GBP/USD heads lower despite BoE-fuelled rebound

GBP/USD enjoyed a period of strength yesterday as comments from Bank of Englang (BoE) members, Saunders and Ramsden, shifted the tone in favour of a more hawkish stance.

That boost appears to have been short-lived, with the pair failing to break through the key $1.3910 level to bring a more bullish outlook. Instead, we are heading back below the 61.8% Fibonacci support level, with the 76.4% threshold next in line ($1.3781). The key here is whether we break back below $1.3742 to bring expectations of another leg lower for the pair. Until then, the ability to react to Fibonacci support will be key in indicating whether we are retracing or simply consolidating ahead of another move lower.

USD/JPY on the rise after BoJ meeting

USD/JPY is finding its feet after a period of weakness, with the pair heading higher off the back of a 76.4% Fibonacci retracement.

An overnight rate decision from the Bank of Japan (BoJ) did little to adjust the monetary policy dials, although they did shift forecasts to predict higher inflation and lower growth. With the price heading higher, we look likely to see further short-term upside, given that this rebound is in its infancy. Nonetheless, we would need to see the ¥110.70 level taken out to provide a wider bullish picture given the recent breakdown.

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