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EUR/USD, GBP/USD surge while USD/JPY establishes a new lower low

Dollar weakness is driving EUR/USD and GBP/USD higher, while USD/JPY has carved out a new lower low in its current pullback.

EUR/USD on the up thanks to Fed

A dovish Federal Reserve (Fed) trumps a dovish European Central Bank (ECB) it seems. The Fed’s shift last week has seen EUR/USD hit a three-month high this morning, raising the possibility that a bottoming process continues to be seen in EUR/USD.

The price held $1.112, and now it has cleared the 200-day simple moving average (SMA) we may see further bullish momentum emerge. The next upside targets are $1.145 and then $1.1554.

GBP/USD returns to key resistance

The bounce here for GBP/USD has carried the price back to the $1.275 zone that stifled progress over the past four weeks.

Above $1.278 the price heads towards $1.287, and then $1.304. A drop at the end of last week ran into support around $1.265, so a renewed bearish view may develop if we move below this level.

USD/JPY pauses after new lower low

The current drop from the April highs established a new lower low at the end of last week for USD/JPY, as the crawl higher in the first half of June gave way to a swift drop.

The bearish view remains firmly in place unless the price moves back above ¥108.80. The next stop to the downside is ¥106.80, the low from January 3.

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