EUR/GBP and USD/CAD weaken, but AUD/USD makes headway
The euro continues to lose ground against the pound, while the US dollar is weaker versus its Canadian counterpart. But hopes of fresh Chinese stimulus have lifted AUD/USD.
EUR/GBP edges back from recent peak
EUR/GBP has retreated from its recent highs, though it has held on to most of the July gains.
A decline back below the 50-day simple moving average (SMA) would reinforce the bearish view, and could then open the way to a fresh test of the lows of July around £0.85. Below this a new lower low would be created, amplifying the expectation of lower prices.
Buyers will want to see a move back above £0.866, and then on to the 200-day SMA, currently around £0.873.
AUD/USD rebounds on China stimulus hopes
After stabilising at the 200-day SMA on Monday, AUD/USD has made further gains overnight, with China stimulus news once again lifting risk appetite.
Having pulled back from the highs of mid-July, the uptrend appears to be in the process of recovering. Further gains target the $0.69 area that marked the peak in June and July, and then above this the price will contemplate a move back towards $0.70, levels not seen since February.
A reversal back below the 200-day SMA would cancel out much of this view, although not negate it entirely, since uptrend support from the June low remains intact. A move back below $0.669 would be needed to break trendline support.
USD/CAD turns lower
After rallying into the end of last week, USD/CAD is once again seeing bearish momentum reassert itself.
The drop back below C$1.32 hands the sellers the upper hand, and puts the mid-July low at C$1.31 back into view as a target. Below this the price targets C$1.296, which was support on the way up in September 2022.
Dollar bulls will want to see a move back above C$1.323, the area that held back progress throughout July so far. A more hawkish the Federal Reserve (Fed) this week might accomplish this, though with the 50- and 200-day SMAs still declining the general view remains bearish.
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