EUR/USD, GBP/USD and USD/JPY declines likely to continue
EUR/ USD, GBP/USD and USD/JPY decline, with further downside looking likely.
EUR/USD declines below long-term trendline
EUR/USD saw a sharp leg lower on Wednesday, with the pair declining below a key descending trendline of support. That raises the possibility of a wider bearish breakdown for the pair.
With the price on the rise, it looks like we are seeing a retracement, with a break through $1.1162 required to provide a more positive outlook. Until that happens, there is a chance we will see another leg lower before long.
GBP/USD consolidates after latest leg lower
As such, any rebound would likely provide us with a retracement of the $1.2249 decline, with a rally through that peak required to bring about a more bullish picture. Until then, the bears look likely to return before long.
USD/JPY slumps into key support
USD/JPY has turned sharply lower from trendline resistance in the second half of the week, with the yen coming into prominence over recent days. This has taken us into the ¥106.77 support level from late June. Given the sharp declines seen into this area, there is a chance that we could see a rebound over the short term.
It all comes down to how the pair reacts to this support level, with a break below providing a bearish continuation signal. However, with dollar volatility around the corner (non-farm payrolls), continued trade above that ¥106.78 level could provide us with a potential area to rebound from. That being said, given this wider breakdown, further downside looks likely in the end and we simply have to discern whether a rebound is come our way today or not.
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