EUR/GBP capped by October peak while AUD/USD resumes its descent
Outlook on EUR/GBP and AUD/USD amid low volume trading into year-end.
EUR/GBP remains capped by its £0.8867 October peak
EUR/GBP's over 3% December advance faltered slightly below the October peak at £0.8867 earlier this week. It has capped the cross since then during low volume trading into year-end ahead of EUR M3 Money supply for December which is expected to come in at 5.0% year-on-year versus 5.1% previously.
While this week’s and the October high at £0.8863 to £0.8867 continue to cap on a daily chart closing basis, the one-month support line at £0.8817 is expected to be revisited. While the next lower Wednesday trough at £0.8795 underpins, however, the currency pair remains in a clear uptrend on the daily chart but has encountered strong resistance.
Only a rise and daily chart close above the October high at £0.8867 would push the minor psychological £0.90 region back to the fore.
AUD/USD resumes its descent
AUD/USD over 10% rise from its October low ended abruptly in mid-December when the cross formed a top at $0.6893 before slipping to last week’s low at $0.663 as the US dollar regained some lost ground on flight-to-safety flows as investors worried about a global recession rearing its head.
Since then, AUD/USD tried to rise again but on Wednesday ran out of steam at $0.6801 and this Thursday is seen sliding back towards the October-to-December uptrend line at $0.6705 with further short-term downside likely to be in store.
The 7 December low at $0.6669 represents another downside target for this week ahead of the recent low at $0.663. Immediate resistance can be spotted at the 22 December $0.6767 high, ahead of this week’s $0.6801 peak.
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