EUR/USD stabilizes while GBP/USD, AUD/USD come off their three-month highs
Outlook on EUR/USD, GBP/USD and AUD/USD as the US dollar gains ground on flight-to-safety flows amid escalation in the Middle East.
EUR/USD stabilizes above 200-day simple moving average
EUR/USD's reversal off Wednesday’s four-month high at $1.1017 on softer eurozone inflation which brought forward European Central Bank (ECB) rate cut expectations for next year and led to a sharp drop in bond yields so far seems to be levelling out above the 200-day simple moving average (SMA) at $1.0822.
If it were to be slipped through, a top would be confirmed and the mid-September and early November highs at $1.0769 to $1.0756 be eyed.
Minor resistance above Monday’s intraday high at $1.0886 can be spotted at Friday’s $1.0912 high. Further up the breached October-to-November uptrend line, now a resistance line, can be found at $1.0943, together with the $1.0945 late August high. Still further up sits the 21 November high at $1.0965.
GBP/USD remains below its near three-month high
Last week GBP/USD made a near three-month high at $1.2733 before losing upside momentum and slipping back to its steep November uptrend line which so far offered support and on Monday comes in at $1.264.
Only a fall through the next lower Thursday low at $1.2604 would put the late June low at $1.2591 on the cards, below which lies the late August low at $1.2549.
Resistance above last week’s high at $1.2733 sits at the late August peak at $1.2746.
AUD/USD comes off its 3 ½ month high
AUD/USD's advance to new 3 ½ month highs at $0.6688 has been followed by a slip back towards its November-to-December uptrend line at $0.6608 as Australia’s monthly inflation gauge rises in November and turns positive for the first time in three months.
While the November-to-December accelerated uptrend line, the 200 SMA and Thursday’s low at $0.6608 to $0.6571 offer support, the recent uptrend remains valid. While the next lower August, September and early November highs at $0.6523 to $0.6511 hold, the current medium-term uptrend will stay intact as well.
A rise above $0.6688 would target the early July high at $0.6705.
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