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EUR/USD quiet and GBP/USD slumping while USD/JPY rallies

Losses are accelerating for GBP/USD, while EUR/USD is quiet and USD/JPY continues its gains for the month of July.

EUR/USD still under pressure

EUR/USD has continued to decline, although it is yet to move below $1.12. Any short-term rebound would need to close back above $1.13 to suggest a bigger move higher is underway, since this is the area that was strong resistance before Friday’s sharp drop.

Below $1.12, and then below $1.119, the mid-June low, the price will push lower, to the May low at $1.1118. A recovery above the 50-day simple moving average (SMA) of $1.124 would provide some near-term bullish momentum.

GBP/USD back to December 2018 low

A new low in the downtrend from the mid-June high sees GBP/USD return to the $1.25 area, the December 2018 support.

Selling intraday rallies has been the approach here since the middle of June, and a rebound towards $1.252 may well provide another such opportunity. Further declines head towards $1.2366 and then on to $1.20.

USD/JPY continues July rally

The rally since the end of last week has created a new higher high for USD/JPY, as it pushes up from the late-June low.

The pair has staged an impressive turnaround, and now it needs to hold above ¥108.80 to clear the mid-June resistance area. Above this, ¥109.55 becomes a target. Pullbacks towards ¥108.00 and rising trendline support from the June low may provide a fresh buying opportunity.

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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