The pound continues to look robust, while the euro is still in a downward move versus the US dollar. 

Dollar and pound
Source: Bloomberg

GBP/USD prevented from moving upwards

Cable continues to respect the rising hourly trendline but so far is unable to make much progress above $1.56. Yesterday we saw it spike towards $1.57, but the resistance zone (red box on hourly chart) that has held back gains since mid-July is still preventing real moves upwards for the time being.

The really bullish development would be a close above $1.5680, but so long as we remain above the 200-hour SMA ($1.5573) then I will still be cautiously bullish. 

EUR/USD could see a move back to month lows

Having been unable to push on beyond $1.11, EUR/USD has fallen back to the 200-hour SMA at $1.0970.

The rising hourly trendline that supported gains for a time was lost yesterday, so now we look for a move back to the lows of the month just above $1.08.

Daily stochastics have yet to turn firmly bearish, but another weak close today will complete the picture. 

USD/JPY could target ¥125.80

The dollar continues to strengthen here, with gains over the past three sessions pushing it back towards key resistance around ¥124.20. A breakout above this level for USD/JPY would head towards the June highs around ¥125.80.

A turn lower would need to break below the 50-day SMA at ¥123.45, this indicator having provided support during the course of the past week.

USD/CAD eyes 200-hour SMA

US dollar bears managed to push the pair below C$1.29 yesterday, but this proved to be a short-lived move, with a firm recovery in place today. The pair now needs to break above the 200-hour SMA at C$1.2994 to confirm that the move higher is still in place.

A failure to maintain moment today will call into question the lows seen on Wednesday, and may cause the outlook to switch back to being firmly bearish for USD/CAD.

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