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EUR/USD and GBP/USD head lower as USD/JPY surge continues

Dollar strength continues to push USD/JPY higher, while keeping the pressure on EUR/USD and GBP/USD.

EUR/USD hits two-month low

The retreat continues for the EUR/USD, which sank to a two-month low on Wednesday.

Lower daily highs point towards continued selling pressure, which brings $1.194 and then $1.188 into view as near-term possible support. Alternately we wait for a break back above $1.21 as evidence that a higher low has been formed.

GBP/USD losses accelerate

A deeper pullback appears to be underway here, as the price of GBP/USD drops below $1.366 and looks to push towards the 50-day simple moving average (SMA) at $1.3533, and then down to $1.347.

The tight range-bound trade of late January has finally given way to the downside, as the price retreats from a higher high above $1.37. As with EUR/USD, the procession of daily lower highs points to a market where the sellers have regained control for the time being.

USD/JPY climb continues

A real change of trend could be underway here, as the price of USD/JPY pushes on through ¥104.80 to hit its highest level since mid-November.

¥105.50 is the next target, the early November peak, and while the breakout appears to have changed the narrative, it will be up to the buyers to ensure that a higher low can be established in due course to reinforce the new outlook.

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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