EUR/USD, GBP/USD and AUD/USD in further falls
The US dollar remains strong ahead of the monthly jobs report, with EUR/USD looking set for a return to parity.
EUR/USD takes more steps towards parity
The psychologically-important parity level looms large for EUR/USD at present, with the pair now at a fresh twenty-year low this morning.
The renewed bout of dollar strength has pushed the pair sharply lower this week, reversing the modest bounce of late June. The price had rebounded to the 50-day simply moving average (SMA), but in a classic downtrend move the sellers then drove it lower. Parity ($1.00) and then the $98.50 level come into view from here.
If a bounce materialises then it needs to recover $1.03 to have a fighting chance, bringing $1.0352 and then the 50-day SMA into play once more.
GBP/USD’s brief rebound eases
The resignation of Boris Johnson as Prime Minister (although he is, at present, remaining as caretaker) allowed the pound to make some short-term headway against the dollar with GBP/USD. Indeed, we may have positive divergence on daily stochastics, with the price making a lower low this week but stochastics making a higher low. This could be a short-term bullish signal.
Bulls would like to see the price recover $1.208, which would then allow them to contemplate a move to $1.2251 and then the 50-day SMA (currently $1.234).
As noted earlier in the week, GBP/USD has reached fresh post-Covid-19 pandemic lows this week, and a fresh decline below Wednesday’s low of $1.1876 would mark a step towards the 2020 lows towards $1.15 and $1.1426.
Trendline resistance continues to cap AUD/USD gains
Compared to other US dollar pairs the decline with AUD/USD has been relatively gentle, although steady since the middle of June. The Reserve Bank of Australia's (RBA’s) greater hawkishness compared to the Bank of England (BoE) and the European Central Bank (ECB) has no doubt played a part here.
For now, trendline resistance from the mid-June high continues to hold back upside progress. Buyers would be looking for a move above $0.687 and then above $0.69 to break the downtrend.
Further losses target $0.667, and then on towards $0.64.
This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
Start trading forex today
Trade the largest and most volatile financial market in the world.
- Spreads start at just 0.6 points on EUR/USD
- Analyse market movements with our essential selection of charts
- Speculate from a range of platforms, including on mobile
Live prices on most popular markets
- Forex
- Shares
- Indices
