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​​Strong rallies in EUR/USD, GBP/USD and swift decline in USD/JPY are likely to pause

​​Outlook on EUR/USD, GBP/USD and USD/JPY following softening U.S. consumer and producer inflation data.

EUR/USD Source: Bloomberg

​​​EUR/USD trades in 17-month highs

EUR/USD's six consecutive days of swift gains on the back of falling US inflationary pressures have taken the currency pair to levels last traded in February 2022.

​The next upside target is the mid-February 2022 low at $1.128 but the cross may lose upside momentum below this level on profit taking ahead of the weekend.

​Potential minor support can be made out around the March 2022 peak at $1.1185 and then much lower down around the $1.1095 April high.

EUR/USD chart Source: IT-Finance.com
EUR/USD chart Source: IT-Finance.com

​GBP/USD rallies to 16-month high

​When it comes to GBP/USD, weaker-than-expected US consumer and producer price inflation has led to a swift move out of the US dollar which benefitted the British pound with it now trading in 16-month highs versus the greenback at $1.3142.

​If overcome, the December 2021 low at $1.3162 might be reached but around it upside momentum is likely to stall as profit taking towards the end of the week looks probable.

​Minor support probably comes in around the minor psychological $1.30 mark.

GBP/USD chart Source: IT-Finance.com
GBP/USD chart Source: IT-Finance.com

​USD/JPY finds support after six consecutive days of falls

USD/JPY fell out of bed in the course of this week as US inflationary pressures diminished with the cross dropping to a near two-month low at ¥137.25.

​The low was made marginally above the 200-day simple moving average (SMA) at ¥137.04 before the cross stabilised and headed back up towards the ¥138.44 to ¥138.76 early-June lows.

​Together with the breached March-to-May uptrend line at ¥139.28 these levels are expected to thwart any further upside attempt on Friday.

USD/JPY chart Source: IT-Finance.com
USD/JPY chart Source: IT-Finance.com

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