EUR/USD and GBP/USD keep rallying while USD/JPY attempts to stabilise

Dollar weakness has allowed the euro and sterling to rally versus the greenback, while the pullback in USD/JPY continues.

EUR/USD clears $1.20 in move higher

EUR/USD continues its rally, after breaking through $1.20 yesterday. This seems to have opened the way to $1.22, while further gains in the medium-term target $1.234, the peak from January.

The fresh move upwards on Monday puts the buyers firmly back in charge, and cancels out any expectation of a reversal back below $1.196 for the time being.

GBP/USD bounce revives

The bounce from $1.365 continues, with yesterday’s push through $1.39 reviving the bullish case and bringing GBP/USD back to the mid-March high of $1.40.

Further gains above here target the peak from February, near $1.42. For the time being, the bearish view is in abeyance, with the buyers having restored the upward move following the bounce from $1.365.

USD/JPY returns to 50-day MA

USD/JPY's drop below ¥108.30 does reinforce the bearish case, although if the price can bounce from the 50-day simple moving average (SMA) at ¥108.09 then a more bullish view may develop. The pullback from the April high has helped to ease off some of the fervent momentum of the past few months, and the pair now finds itself at a crucial point.

Further declines below ¥107.50 would raise the prospect of further falls that will erode the gains of January and February. However, but if buyers can stabilise the situation and develop a decent bounce, a fresh move to ¥111.00 may be in the offing.

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