EUR/GBP and AUD/USD at key levels as sentiment starts to turn
EUR/GBP rallies into key resistance, while AUD/USD risks rolling over as the price trades around key support.
EUR/GBP rallies into key resistance
EUR/GBP has been on the front foot over the course of the past ten days, with the European Central Bank (ECB) and Bank of England (BoE) meetings providing two very different signals in terms of commitment to higher rates. The fact that we have seen two BoE members push back against any further hikes did signal a willingness to cut this tightening phase short. Since then, the pair has pushed higher, rallying into the key £0.8828 resistance level.
A move through that level would bring about a signal that the pair is set for another push higher, bringing confidence that we have bottomed out. However, as things stand we are starting to move tentatively lower, signalling the potential for a pullback over the near term. As such, the reaction to this level is going to be key in determining where we go from here. In particular, if we see a move up through £0.8828, it would look likely that the price will continue its push higher.
AUD/USD shows signs of weakness after period of strength
AUD/USD has been showing signs of weakness over the past week, with the recent rally falling short ahead of the 76.4% Fibonacci resistance level of $0.6909. The move back below the $0.6669 swing low brings confidence of another move lower for the pair, continuing the wider bearish trend in play over the course of 2022.
As things stand, we are seeing the pair holding up at this $0.6669 support level. Thus, a strong move below that point would help build confidence that the pair is set to move lower once again.
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