EUR/USD sells off heavily once more, continuing the wider trend. Meanwhile, GBP/USD and USD/JPY are both expected to turn lower before long.
EUR/USD tumbles once moreEUR/USD is working out very well, with the 76.4% resistance marking the top of the market this week, where this morning has seen the creation of a head and shoulders pattern.
The neckline, around $1.1194 could now form new resistance should we see any bounce. However, it looks likely that we will see any rally sold into. This bearish sentiment remains unless we see an hourly close above $1.1226.
GBP/USD gains unlikely to lastGBP/USD has been gaining ground this week, following a sharp sell-off on Friday. This appears likely to be a short-term phenomenon and thus, we perceive this current move higher as a retracement of last week’s sell-off.
With that in mind, watch out for potential resistance at the Fibonacci levels, with the 61.8% ($1.3042) and 76.4% ($1.3072) levels of particular interest. We would need to see an hourly close above $1.3121 to provide clues that this current short-term strength could have longer-term implications.
USD/JPY triangle points to reversal lowerUSD/JPY is gaining ground this morning, with the pair trading within a symmetrical triangle pattern. Taking in mind the long-term downtrend in play, coupled with the direction of entry into this pattern, the resolution is expected to be another move to the downside.
As such, we are approaching interesting areas to get short of this market on the premise that firstly we will continue this pattern by selling back into trendline support, and secondly we will ultimately break out the bottom of this pattern. Thus a bearish short-term outlook remains, with an hourly close above ¥100.99 required to negate this view.
