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EUR/JPY, GBP/USD and USD/JPY likely to reverse lower

Weakness likely to lie ahead for EUR/USD, GBP/USD and USD/JPY, with recent gains being reversed this week.

EUR/USD rebound likely to give way to further downside

EUR/USD has been selling off sharply since breaking below the trendline support that underpinned a symmetrical triangle over the course of last week.

Yesterday’s losses gave way to a gradual rise throughout the remainder of the day, with price now flatlining overnight. Given the recent formation of lower highs and lows, this pair is expected to decline once again. A break through $1.1025 would be required to negate this bearish short-term outlook.


GBP/USD poised for bearish reversal after recent gains

The GBP/USD uptrend has been broken this week, with price falling below the $1.2436 support level yesterday. Price has been trading sideways since, yet we look to be seeing the beginning of the next breakdown given the sharp breakdown this hour.

A break below $1.2413 would bring a confirmation signal of another bearish turn. However, with the Supreme Court ruling due for 10:30am, there is an important political hurdle to consider for sterling traders.


USD/JPY reversal slowly taking shape

USD/JPY has been turning lower from an important confluence of resistance, with price having met both ascending and descending trendline resistance last week. We have been creating lower highs and lows since, with yesterday’s sharp move lower providing the latest such move.

While the pair has managed to gain ground overnight, there is a strong chance that this is a precursor to further downside. As such, bearish positions are preferred from a deep retracement (76.4% resistance have been respected thus far), with a rise through ¥107.77 required to negate this outlook.

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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