EUR/USD, GBP/USD, and USD/JPY driven by a resurgent dollar
EUR/USD, GBP/USD, and USD/JPY see the dollar dominate as markets come under pressure on second wave fears.
EUR/USD reversal in play as dollar comes into focus
EUR/USD looks to have finally turned a corner this week, with the uptrend seen since the June lows now being reversed.
There is a strong chance that this decline will be a retracement of the wider $1.1168-$1.2011 rally, with further downside to come. The four-hour chart highlights this recent reversal in play, with the price attempting to regain ground yesterday.
Further downside looks likely from here, with a break through the $1.1719 level required to signal a wider upward retracement of the decline from $1.1871 coming into play. In any case, the recent breakdown appears to signal an impending period of downside for the pair.
GBP/USD likely to fall further before long
GBP/USD has been on the back foot once more this week, with the pair hitting a two-month low on Wednesday.
While we are seeing the price attempt to arrest those decline since, we are likely going to see further downside before long. As such, a break back below $1.2675 points towards immediate weakness, whereas a rise above $1.2777 raises the likeliness of a short-term upward retracement coming into play. In either case, we would need to see $1.3007 broken to negate the current bearish outlook.
USD/JPY rises into Fibonacci resistance
USD/JPY has been on the rise over the course of the week, with the price coming within touching distance of the 61.8% Fibonacci resistance level overnight.
The wider downtrend does raise the likeliness of a bearish turn before long, with a drop below the ¥105.20 mark bringing about a fresh bearish signal. Until then, this short-term recovery could persist as we move into the deep retracement zone.
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