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Dollar strength in play for EUR/USD, GBP/USD and USD/JPY

EUR/USD, GBP/USD and USD/JPY driven by dollar strength as US yields continue to rise.

Transcript

EUR/USD fading as ECB dent rise in European 10-year yields

EUR/USD is on the back foot this morning, with yesterday’s European Central Bank (ECB) actions driving a divergence between US and eurozone treasury yields. That widening gap will likely drive EUR/USD lower if it persists, with the currency pair looking to end a recent rebound.

Despite failing to reach a deeper Fibonacci level, we are now seeing a more bearish stance come back into play. A break below trendline support has now taken us towards the $1.1928 support level. A break below that point would signal a potential bearish reversal coming into play which furthers the wider downtrend in play despite recent gains. As such, the ability to break below the $1.1928 should tell us a lot about the near-term outlook for this pair.

GBP/USD pulls back from key resistance

GBP/USD has managed to recover a significant amount over the course of the week, with the pair moving into the key $1.40 handle.

While the price has initially turned lower from that resistance point, the pullback has taken us into trendline support. With that in mind, there is a good chance we see the bulls come back into play before long. Alternatively, a break below the $1.3845 level would be required to bring a fresh bearish view for this pair.

USD/JPY breaks higher from consolidation phase

USD/JPY has finally broken from its recent consolidation phase, with the pair looking likely to continue its impressive uptrend from here.

That uptrend should bring a strong move higher from here, with a decline through the recent swing low of ¥108.35 required to negate that bullish outlook.

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