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Dollar weakness lifts EUR/USD and GBP/USD while hitting USD/JPY hard

After a weaker US CPI print yesterday the dollar gained, but this state of affairs has reversed in early trading on Wednesday.

EUR/USD holds 50-day SMA

Hopes of a rebound yesterday with EUR/USD were dashed, but again the price is holding the 50-day simple moving average (SMA) $1.1801, keeping the possibility of a new bounce open.

This would then mark a resumption of the move higher from mid-August, targeting $1.19 and higher. Sellers have been unable to revisit last week’s low, and until they do, the bearish view is cancelled out.

GBP/USD rallies after CPI figures

Cable’s gains in the wake of employment data yesterday with GBP/USD fizzled out after US consumer price index (CPI), but as with EUR/USD the pair has not make a move back to last week’s lows.

Again, the 50-day SMA ($1.3807) continues to provide support, with the price still apparently girding itself for a new move back towards $1.39 following a strong UK CPI reading. A conclusive break lower still eludes the sellers, leaving the bull case intact.

USD/JPY slumps after break below trendline support

USD/JPY weakness has finally precipitated a change here, as the bear case roars back into life.

A classic case of a break of trendline support has seen the price drop sharply, leaving the bears firmly in charge, opening the way to more downside below ¥109.00 unless the buyers can somehow find the strength for a bounce.

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