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EUR/USD and GBP/USD drop as USD/JPY breaks higher

Dollar strength has seen USD/JPY stage a breakout, while putting further pressure on EUR/USD and GBP/USD.

EUR/USD pushing lower again

The EUR/USD pair has been losing ground steadily over the past few sessions. Since 18 August we have seen it create several lower highs and lower lows on the hourly chart, with yesterday’s failure to break $1.185 another bearish short-term development.

A renewed decline today below $1.178 would bring $1.175 into view, and then down to $1.172. A rally through $1.185 is needed to break the current sequence of lower highs.

GBP/USD falters in early trading

Rebounds for GBP/USD, which have been quite dramatic, have also been short lived.

Yesterday’s weak bounce could not hold $1.314 and the rally off the overnight lows has run its course at $1.311. Below $1.305 the price encounters the support zone at $1.3015, which has held back further downside so far this month.

USD/JPY breaks out of triangle

The price of USD/JPY has climbed steadily higher over the last few sessions, and has shrugged off some overnight weakness to clear trendline resistance from the 19/20 August high.

This breakout may provide fresh bullish momentum, targeting ¥106.10, and opening the way to a recovery of some of the ground lost in mid-August. Rising trendline support from the 19 August low comes into play around ¥105.90.

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