EUR/USD rallies but GBP/USD and USD/JPY still under pressure

The euro continues to display strength against the dollar, while the yen is also managing to hold back any further gains for the greenback.

EUR/USD

EUR/USD continues to consolidate after its strong move higher earlier in the week, and having breached downtrend resistance from the June high, it is looking much stronger.

Dips towards $1.12 have found buyers, and a move through $1.124 would mark a fresh bullish development. A move back below $1.116 is needed to revive a more bearish view.

GBP/USD

Modest rallies off the lows for GBP/USD have failed to shift the dial from the broadly bearish view. Gains above $1.22 have proven difficult to sustain, and with a small overnight bounce a fresh selling opportunity may have arisen.

A close above $1.225 would start to form a more bullish view in the short term, targeting $1.2366. A fresh move lower from $1.22 would target $1.21 and lower.

USD/JPY

USD/JPY has, for now, established a bottom at ¥105.50, but this lower low continues to reinforce the bearish view. The gains made earlier in the week have been eroded, with the price failing to hold first ¥107.00 and then ¥106.50.

Overnight gains stalled below ¥106.30, so if this continues to act as resistance a third test of ¥105.50 may be in the offing. A rally through ¥106.50 would help to dispel some of the bearish atmosphere, but even then the longer-term sequence of lower highs and lower lows remains in place.

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