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CFDs are complex financial instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money. CFDs are complex financial instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.

​​EUR/USD drops to nine-month low, AUD/USD to near eleven-month low while EUR/GBP keels over

Outlook on EUR/USD, EUR/GBP and AUD/USD as baked in ‘rates higher for longer’ scenario pushes greenback close to ten-month highs.

AUD Source: Bloomberg

EUR/USD drops to nine-month low

​​A rising US dollar and yields as investors fully realise that rates are staying higher for longer with rate cut expectations being pushed back to the back end of next year have forced EUR/USD lower to a nine-month low.

​The mid-November high, early and December low and January trough at $1.0484 to $1.0444 offer support which is likely to hold, at least in the short term. Below it lies the August 2022 high at $1.0368.

​Initial resistance comes in at the $1.0516 March low and further resistance at Thursday’s $1.0617 low and more important resistance between the May low and mid-September low at $1.0632 to $1.0636.

EUR/USD chart Source: IT-Finance.com
EUR/USD chart Source: IT-Finance.com

​EUR/GBP falls short of the 200-day simple moving average

EUR/GBP flirted with its £0.8701 July peak since last week but fell just short of the next higher 200-day simple moving average (SMA) at £0.8711 before keeling over and falling back to the £0.8658 June high.

​A medium-term top is thus likely in place with the September support line at £0.8622 as well as the late-August high at £0.861 likely to be revisited in the near future, provided that this week’s high at £0.8706 isn’t overcome.

​Minor resistance below this level can be spotted at the £0.8669 August high.

EUR/GBP chart Source: IT-Finance.com
EUR/GBP chart Source: IT-Finance.com

AUD/USD drops to near eleven-month low

​The appreciating US dollar continues to push AUD/USD lower with it having dipped to a near eleven-month low at $0.6332 on Wednesday before recovering overnight.

​The mid-August low at $0.6365 is currently being probed, above which minor resistance sits at the 21 September low at $0.6385. While the cross remains below its $0.6511 to $0.6522 late-August and current-September highs, the downtrend remains intact.

​A fall through $0.6332 would probably engage the $0.6273 November 2022 low ahead of the $0.6171 October 2022 trough.

AUD/USD chart Source: IT-Finance.com
AUD/USD chart Source: IT-Finance.com

This information has been prepared by IG, a trading name of IG 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.
CFDs are a leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your initial deposit, so please ensure that you fully understand the risks involved.

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