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EUR/USD and GBP/USD weaken as USD/JPY bounce gathers pace

Dollar strength has lifted USD/JPY, whose rally has entered a third day, but EUR/USD and GBP/USD are retreating.

EUR/USD moves lower

EUR/USD managed to break out of a short-term descending channel at the end of last week, but gains stalled yesterday below $1.19.

If the buyers are to really reassert control then a move above $1.19 and then $1.196 would be required, clearing the way for a bigger move to the upside. Sellers will hope that the price will turn back lower and target last week’s lows near $1.175.

GBP/USD falters at $1.39

With GBP/USD having recovered to an extent, and continuing to hold the $1.375 area, the price now looks for a move back towards $1.40.

Friday’s bounce was a powerful thrust, and dealt a blow to the bearish view. While there wasn’t much movement yesterday at least it held its ground, providing a base for further gains.

USD/JPY bounce enters a third day

Five days of losses with USD/JPY brought the price back to the 50-day simple moving average (SMA) currently ¥109.85, where a defence was mounted and a new bounce appears to have begun.

Further gains target the peak from the beginning of the month, towards ¥111.57. A renewed bearish view requires a move back below last week’s higher low and then below ¥109.55.

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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