EUR/USD, EUR/GBP are heading back down again while AUD/USD tries to recover
Outlook on EUR/USD, EUR/GBP and AUD/USD amid UK unemployment data and RBA April minutes.
EUR/USD weighs on March-to-April uptrend line
Last week’s EUR/USD 13-month high at $1.1075, due to diminishing Federal Reserve (Fed) rate hike probabilities following much weaker-than-expected as US retail sales, took the cross down to its March-to-April uptrend line at $1.0938 which is currently being tested.
A tumble through it and to below Monday’s $1.091 low would likely engage the $1.0832 to $1.0804 mid-February and 10 April lows which represent significant support for the recent uptrend.
Minor resistance may be encountered around the $1.0929 late-March high and also at the $1.0973 early April high. Only a rise above the latter level would put the minor psychological $1.10 mark and the $1.1033 February peak back on the cards. Further up sit last week’s peak at $1.1075, ahead of the January 2022 low and early-March 2022 high at $1.1121 to $1.1122.
EUR/GBP has been rejected by its £0.8865 late-March high
EUR/GBP's rejection by its late-March high at £0.8865 is continuing with the cross expected to slide further still as UK unemployment data comes in slightly worse-than-expected at 3.8% (versus 3.7%) and the UK claimant count change at a much higher-than-expected 28.2K (versus -11.2K in January) with average hourly earnings rising by 5.9% in February instead of an expected 5.1%, pointing towards the possibility of another rate hike by the Bank of England (BoE) being seen.
The currency pair thus trades back below its 55-day simple moving average (SMA) at £0.8831 and may drop further towards the £0.88 mark while the 13 April high at £0.8838 caps.
AUD/USD recovers as Reserve Bank of Australia accesses outlook
AUD/USD is seen to recover from Monday’s $0.6682 low as the Reserve Bank of Australia ((RBA) minutes showed that it held the cash rate steady at 3.6% during its April meeting as it wished to account for policy lags but that it would resume tightening should this be required.
This boosted the Australian dollar and led it back towards the 200-day SMA at $0.6744, above which the 55-day SMA can be found at $0.6774. The area between the two moving averages may cap any further upside on Tuesday. Should this not be the case, last week’s high at $0.6806 should do so.
A continuation of the recent sell-off and fall through this week’s low at $0.6682 would push the October-to-April uptrend line at $0.6642 back to the fore. Below it the 10 April low can be seen at $0.662.
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