EUR/USD and AUD/USD remain bid while EUR/GBP stabilises
EUR/USD remains bullish despite weak German retail sales, AUD/USD bid while EUR/GBP stabilises.
EUR/USD has a bullish bias despite weak German retail sales
EUR/USD trades back around the $1.02 mark, having recovered from last week’s $1.0097 low after the Federal Reserve's (Fed) fourth consecutive rate hike by 75 basis points (bps) and as the Fed Chair Jerome Powell said it will become appropriate to slow the pace of increases depending on the inflationary and economic outlook.
The cross remains short-term bid despite German retail sales slipping to 1.6% month-on-month (MoM) in June versus a revised 1.2% in May and compared to a market forecast of an 0.2% increase. Resistance for the currency pair sits between the late July highs at $1.0258 to $1.0278 and minor support between the one-month uptrend line and last week’s low at $1.0147 to $1.0097. Significant resistance above $1.0278 can be found in the $1.034 to $1.036 zone which consists of the December 2016 and January 2017 as well as the May and June 2022 lows.
Were a currently unexpected descent to take the cross below $1.0097, parity would be back in focus. Below it the July trough lies at $0.9952. Failure there would engage the $0.9698 to $0.9593 support area which is comprised of the June 2000 and February 2001 highs and the September 2002 low.
EUR/GBP tries to stabilise above four-month lows
EUR/GBP tries to stabilise above last week’s low at £0.8346, having slipped to it as Gazprom reduced the gas supply through the Nord Stream 1 pipeline to 20% and German recession fears increased amid German Gfk consumer confidence which dropped to an all-time low.
Minor resistance above the £0.8403 to £0.8415 mid-July low and Friday’s high can be seen along the 200-day simple moving average (SMA) at £0.8443. While remaining below it, the cross is considered to be bearish.
Slips should find interim support around the May low at £0.8367, a drop through which engage last week’s trough at £0.8346. Below it lie the February and late March lows at £0.8307 to £0.8296.
AUD/USD targets $0.7069 mid-June high
AUD/USD's rally from its $0.6682 mid-July low retested its breached April-to-July downtrend line on Friday but closed above it on a weekly chart basis which points to further upside being in the works, despite disappointing Australian retail sales (published last week), which showed the slowest rate of sales growth since January at 0.2% in June versus 0.9% in May.
Since the trendline break has been validated, the mid-June high at $0.7069 is considered to be the next upside target, a rise above which could lead to the May and June highs at $0.7266 to $0.7283 being reached over the coming weeks and months.
Minor support is seen along the one-month support line, the breached downtrend line and Friday’s low at $0.6932 to $0.6911.
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