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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 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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