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Dollar downside coming back into play for EUR/USD, GBP/USD and USD/JPY

Dollar downside looks likely to return once again, with EUR/USD, GBP/USD, and USD/JPY all starting to reverse after the latest retracement.

EUR/USD turning higher after 76.4% retracement

EUR/USD is on the rise following a retracement into the 76.4% Fibonacci retracement level.

The recent rally through $1.1832 provided a bullish signal for the pair, with the latest pullback looking like a retracement within that move. As such, further upside looks likely from here as we build on the bullish reversal break.

GBP/USD pullback likely to provide buying opportunity

GBP/USD is also attempting to reverse higher after a decline which has taken the pair towards the 50% retracement level.

While the size of that retracement does highlight the potential for a deeper pullback coming into play, it makes sense to watch out for a bullish resurgence before long. That bullish outlook holds until we see a break below the $1.2911 level.

USD/JPY expected to decline further after recent rebound

USD/JPY has been attempting to regain ground following a sharp decline that completed a bearish head and shoulders formation.

That short-term bearish pattern, coupled with the wider long-term downtrend, highlights the likeliness that we will continue to move lower from here. With that in mind, further downside is expected, with a bearish outlook in play unless we see a break through the ¥105.74 level.

This information has been prepared by IG, a trading name of IG US LLC. This material does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. You should not treat any opinion expressed in this material as a specific inducement to make any investment or follow any strategy, but only as an expression of opinion. This material does not consider your investment objectives, financial situation or needs and is not intended as recommendations appropriate for you. No representation or warranty is given as to the accuracy or completeness of the above information. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. Any research provided should be considered as promotional and was prepared in accordance with CFTC 1.71 and designed to promote the independence of investment research. See our Summary Conflicts Policy, available on our website.

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