EUR/USD, GBP/USD and AUD/USD drop as greenback fights back
Outlook on EUR/USD, GBP/USD and AUD/USD as investors reassess odds of Fed March rate cut.
EUR/USD slips through uptrend line as US dollar appreciates
EUR/USD'S slide from last week’ s high around the $1.10 mark has taken it through the November-to-January uptrend line at $1.093 as the US dollar climbs on expectations US data such as upcoming retail sales will show the US Federal Reserve (Fed) may yet be steered into leaving rates on hold in March.
In focus are the early January lows and the 55-day simple moving average (SMA) at $1.0894 to $1.0877 which are expected to offer support. If not, the 200-day SMA at $1.085 may be reached as well.
Immediate resistance above the breached uptrend line sits at Monday’s $1.0946 high and is followed by Tuesday’s $1.0967 high. Further up lies stronger resistance at the 5 and 11 January highs at $1.0998 to $1.1001.
GBP/USD weighs on November-to-January uptrend line
GBP/USD is seen coming off last week’s $1.2786 high as investors reassess the probabilities of the first Fed rate cut being seen in March and as the greenback appreciates on the back of this.
The November-to-January uptrend line at $1.269 is under pressure, a daily chart close below which may lead to the early January low at $1.2611 being revisited.
Resistance above Tuesday’s $1.2716 intraday high comes in between the 2 and 11 January highs at $1.276 to $1.2786.
AUD/USD drops to one-month low
AUD/USD's descent from its five-month December peak at $0.6871 has resumed amid worsening Australia consumer confidence data and an appreciating US dollar.
The October-to-January uptrend line is being slipped through with the 55-day SMA at $0.6623 offering support. Were it and Tuesday’s intraday low at $0.661 to be slid through, though, the 200-day SMA at $0.6584 would be back in sight ahead of the $0.6525 to $0.6523 support area. It consists of the early November high and the early December low.
Minor resistance above Tuesday’s $0.665 intraday high lies at Friday’s $0.6678 low and more significant resistance in the $0.6728 to $0.6734 region where several daily highs were made in early January. While they cap, the medium-term trend remains bearish.
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