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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.

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

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