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Will the dollar continue to dominate after Fed-led moves for EUR/USD, GBP/USD, and USD/JPY?

Dollar strength sparks EUR/USD and GBP/USD weakness, although USD/JPY has managed to claw back much of that initial FOMC-led move.

​EUR/USD at risk of further downside

EUR/USD has been attempting to consolidate overnight, following a period of a dramatic weakness in the wake of the FOMC meeting. That collapse on the pair has been driven predominantly by a stronger dollar, but that move may not be over quite yet.

The decline we have seen over recent hours does point towards a potential bearish continuation, with a break back below $1.1892 bringing greater expectations of another move lower. Alternately, a break up through the $1.1925 level would point towards a likely retracement of the selloff from $1.2006 coming into play.

GBP/USD slumps in early trade

GBP/USD has continued the declines seen over the course of the week, with the pair falling back into a six-week low. The capitulation of this pair may not be over quite yet, with the trend of lower highs crucial to the current bearish trend.

For now, there is a chance we could come into another upward retracement phase given the recent decline, with a rise up through $1.3944 required to bring about a wider bullish picture. Until that level is taken out, there is a good chance that the pair weakens further before long.

USD/JPY continues to weaken after jobless claims rise

USD/JPY has seen plenty of volatility over recent days, with the FOMC-led rally on Wednesday being followed up by a sharp pullback after a disappointing rise in the US jobless claims figure.

While we do still have a bullish trend in place, the current break below 76.4% Fibonacci support does point towards a potential wider retracement of the rally from ¥109.19 coming into play. As such, while the bulls are expected to return soon, the question of when that comes is dependent upon whether we see ¥109.80 broken or not. ​

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