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EUR/USD hits trendline resistance, while USD/JPY edges up and USD/CAD holds steady

The euro has seen its rebound against the dollar stall, while the US currency has made some gains against the yen and the Loonie.

EUR/USD Source: Bloomberg

EUR/USD tests trendline resistance

The EUR/USD has continued to rally, moving back to $1.06 on Tuesday.

However, this brings the pair towards trendline resistance from the July highs. The last time this trendline was tested as back in August, and resulted in a fresh drop. A failure to close above the trendline maintains the bearish view and could see a lower high created.

In the short term, a continued rally could target $1.07 and then $1.0735.

EUR/USD chart Source: ProRealTime
EUR/USD chart Source: ProRealTime

USD/JPY struggles to move higher

Some bullish momentum has faded here with USD/JPY after the surge to ¥150.00 last week.

However, the broader uptrend is still intact, with the price yet to test last week’s lows or the still-rising 50-day simple moving average (SMA). A close above ¥149.50 could signal that another attempt to close above ¥150.00 could be in progress, though that might risk intervention by Japanese authorities.

Even a deeper retracement towards ¥145.00 would still leave the uptrend broadly in place.

USD/JPY chart Source: ProRealTime
USD/JPY chart Source: ProRealTime

USD/CAD drops back from higher high

The USD/CAD rally here from the summer lows continues, though a weaker dollar has seen a sharp pullback from last week’s higher highs.

A drop towards the 50-day SMA or uptrend support from the July lows looks likely, and could see fresh buying pressure emerge. Should a higher low be created, then a new leg higher towards C$1.37 and higher could begin.

A close below trendline support would dent the bullish thesis, though mid-September saw buyers emerge around C$1.34/C$1.345. A more bearish view would need a close below this mid-September zone of support.

USD/CAD chart Source: ProRealTime
USD/CAD chart Source: ProRealTime

This information has been prepared by IG, a trading name of IG Markets Ltd and IG Markets South Africa Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

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