Dollar weakness this morning has put new life into sterling and the Aussie, and has dented the steady trend in USD/JPY.

Euro and US dollar notes
Source: Bloomberg

GBP/USD extends gains

Having pushed through the $1.5250 resistance level, the pair has extended gains and now looks to be heading towards $1.53 and then on to the 200-day SMA at $1.5340. If the price can get that far then the top end of the descending channel is in sight, with a target around $1.54. It would take a significant turnaround and a close below $1.52 to put the sellers back in charge.

EUR/USD below $1.0670

The overnight rally in EUR/USD has been reversed, putting the pair back below yesterday’s $1.0670 resistance level. Support is possible around $1.0640, the lows from the previous two days, with more support around $1.0620. Until this range is broken the pair may well continue the indecisive pattern that has dominated this week. 

AUD/USD moves past $0.7150

AUD/USD has broken through the top end of the descending channel, pushing through the key $0.7150 area. Attention now turns to resistance around the November highs of $0.7190, with a move through here clearing the way of $0.7250 and then $0.73.This bullish outlook is only negated if there is a move back through $0.71 itself, key support over the past few days and back inside the descending channel.

USD/JPY bullish trend remains

The rising trendline is still in effect here, even if the price has faltered once again at ¥123.50. A pullback towards the trendline around ¥122.90 would likely see some more buyers step in. If this occurs then we may well see another attempt to push on to ¥124. A move below the ¥122.50 level would cancel out the bullish trend and raise the prospect of a retracement, perhaps as far as ¥121. 

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