EUR/USD and GBP/USD move higher as USD/JPY heads down

Dollar weakness continues to provide an opening for EUR/USD and GBP/USD to rally, as USD/JPY sustains further losses.

EUR/USD intraday higher high established

A short-term rebound continues to gather pace, with EUR/USD pushing back towards recent highs at $1.1374, having produced a higher high in early trading.

We look for a potential retracement towards $1.127 that will create a higher low for additional or new long positions, with this bullish view negated if the price drops back towards $1.124.

GBP/USD recovers to Friday peak

A more modest bounce here has seen GBP/USD return to the 26/29 November peak at $1.336.

Losses have stabilised for now around $1.33, although we have yet to see any bullish divergence on hourly stochastics. We look for a continuation of gains towards $1.339 and a new higher high, and await a possible higher low as a sign that the bullish view is gathering strength.

USD/JPY slumps below Friday low

The fall below the 26 November low hands the initiative to the sellers, with a USD/JPY bounce back towards ¥113.40 providing a lower high and a better risk-reward dynamic than at current levels.

A move back above ¥114.00 would be needed to put the buyers back in charge.

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