Dollar weakness boosts EUR/USD and GBP/USD, while USD/CAD turns lower
The dollar continues to weaken, lifting EUR/USD, and GBP/USD, while USD/CAD looks likely to continue its wider bearish trend.
EUR/USD starts to regain ground after latest decline
EUR/USD has been a consistent underperformer of late, with the latest declines taking the pair into a fresh five-month low last week. However, we are continuing to build on that rise seen last week as price passes through trendline resistance. That does point towards the potential for further short-term upside, yet we are likely to be seeing a retracement phase rather than an all-out reversal.
With that in mind, short-term upside is likely to provide a selling opportunity. Particular interest comes around the 61.8% and 76.4% Fibonacci levels ($1.188-$1.1921) for a potential bearish reversal. Ultimately, whether we see a deep retracement or not, a bearish wider outlook remains unless price rises through $1.20 resistance.
GBP/USD rises towards Fibonacci resistance
GBP/USD has also been gaining ground, with the pair pushing towards the 76.4% Fibonacci resistance level at $1.3935. The recent trend of lower highs thus comes into play, with a bearish reversal still possible around that impending resistance level.
A move below the $1.3811 low add greater credence to the notion that this latest rise is simply a retracement before we head lower once again. Ultimately, we would need to see a break through $1.4017 to break from the recent bearish trend and bring a resumption to the uptrend that dominated the past year.
USD/CAD likely to continue its recent decline
USD/CAD has turned lower from trendline and Fibonacci resistance (76.4%), with the pair looking to continue the downtrend that has dominated the past year.
A short move higher in early trade does little to change that bearish view, with the recent breakdown looking likely to continue from here. With that in mind, bearish positions are favoured from here. A rise through $1.2595 would be required to negate the bullish intraday trend that is gradually building from this 76.4% Fibonacci reversal.
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