With EUR/USD and USD/JPY both hitting Fibonacci resistance, coupled with a GBP/USD break higher, could we be seeing reversal across the board?
EUR/USD hits key Fibonacci resistanceEUR/USD has finally reached the 76.4% retracement of the referendum day devaluation. This is the area of retracement we have been looking for as a potential reversal point for this market. Essentially, getting short here is a play on the long-term downtrend evident within the pair.
Essentially, while we have not seen any reversal signals yet, a 3:1 trade for a break back to $1.0952 rather than above $1.1428 would make sense given the wider trend.
We would need an hourly close above $1.1428 to negate this bearish view.
GBP/USD rallies through key levelGBP/USD rallied through the $1.3034 level yesterday, providing us with a new higher high on an intraday basis. This points towards a potential strengthening for the pair over the short-term. Certainly we are looking at a highly overbought market which could reverse lower for a retracement before moving higher. However, it does look like we could ultimately move higher soon.
An hourly close above $1.3071 would provide greater confidence that we are going to move into a more bullish short-term phase, with $1.3094 and $1.3175 the next resistance levels.
USD/JPY turns lower following retracementUSD/JPY is selling off following a sharp appreciation into the 76.4% retracement over the past 24 hours. Coming off the back of a clear downtrend, it makes sense that we will see another leg lower, with greater confidence coming with a push below ¥100.48.
Essentially, a bearish view remains in place unless price breaks and closes back above ¥101.46.
