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EUR/USD and GBP/USD climb as USD/JPY turns lower

Dollar weakness continues to be felt across FX markets, bolstering EUR/USD and GBP/USD but keeping USD/JPY on the back foot.

EUR/USD rally shows no sign of slowing

The euro continues to make hay against the US dollar. Higher lows and higher highs continue to be seen here for EUR/USD, with the bounces off the rising 50-hour simple moving average (SMA), currently $1.1687, on Thursday and Friday providing proof of the trend’s current strength.

Further gains seem likely, with no sign of any reversal yet developing.

GBP/USD keeps on climbing

After breaking through $1.277 last week the price of GBP/USD has not looked back, surging to $1.29.

Some overnight weakness leaves the uptrend intact however, and it is likely that higher lows will continue to be looked on as possible buying opportunities. A reversal back below $1.277 might suggest some near-term weakness, potentially testing $1.265 again as it did last week.

USD/JPY rebounds towards higher low

An overnight bounce for USD/JPY merely provides fuel for short-sellers as the price rallies back towards the declining 50-hour SMA (¥105.70).

After the straight-line move of last week some form of rebound was to be expected, but it merely provides a better risk-reward for short positions. A rally through ¥106.20 is needed to put a more meaningful dent in the downtrend.

This information has been prepared by IG, a trading name of IG US LLC. This material does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. You should not treat any opinion expressed in this material as a specific inducement to make any investment or follow any strategy, but only as an expression of opinion. This material does not consider your investment objectives, financial situation or needs and is not intended as recommendations appropriate for you. No representation or warranty is given as to the accuracy or completeness of the above information. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. Any research provided should be considered as promotional and was prepared in accordance with CFTC 1.71 and designed to promote the independence of investment research. See our Summary Conflicts Policy, available on our website.

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