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EUR/USD under pressure while GBP/USD and USD/JPY look to push on

The EUR/USD decline looks set to continue, but cable and dollar-yen are continuing to recover.

EUR/USD threatens bearish turn

The EUR/USD rebound came under pressure at the end of last week as the pair fell sharply on Friday.

While it has yet to head back to the 14 November low of $1.099, the overnight bounce has so far been fairly anaemic. Friday saw a lower high established around $1.109, so any failure to move back above this would provide a fresh selling opportunity. A move through the $1.11 peak from last week would reinforce the more bullish view.

GBP/USD rebounds in early trading

After moving lower over the past week, the GBP/USD price has found some support around $1.282.

To provide a more bullish view, the pair needs to move above $1.293, the highs from Friday, which would open the way to testing $1.297 and higher, which has held back progress since mid-October. A lower high in today’s session would revive the short-term bearish view, but it is worth noting that dips towards $1.277 have been buying opportunities of late, which means a firmly bearish view requires a move below this level.

USD/JPY continues its recovery

While the USD/JPY price dropped through trendline support last week, it then found support at the rising 50-day SMA (simple moving average), currently at ¥108.29.

Further gains target ¥109.10, and then on to ¥109.40. For the moment, it looks like the price has created a new higher low, reinforcing the view of further gains over the next few days. A move back below ¥108.25 would be needed to begin to create a more bearish view.

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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