EUR/USD and AUD/USD continue to rise while EUR/GBP struggles
EUR/USD and AUD/USD continue last week’s advances as the US Dollar weakens while EUR/GBP looks subdued.
EUR/USD nears its early May high
EUR/USD’s advance from its mid-May $1.035 low is in the process of breaking through its two-month downtrend line at $1.0571 and is getting ever closer to the early May high at $1.0642, ahead of Germany’s Gfk consumer confidence and first quarter (Q1) Gross Domestic Product (GDP) releases on Wednesday.
The cross also rallied amid comments from the European Central Bank’s (ECB) President Christine Lagarde, essentially pre-committing to a 25 basis point (bp) hike in July and September. A rise and daily chart close above the recent high at $1.0642 would confirm at least an interim bottoming formation with the mid-April low at $1.0758 being targeted in this scenario. Another potential upside target is seen along the 55-day simple moving average (SMA) at $1.0791, near the 2022 downtrend line at $1.0855.
Minor support below Friday’s $1.0533 low can be seen between the April and 6 May lows at $1.0483 to $1.0472. Provided this area underpins, the odds favour a continued advance, at least in the course of this week.
EUR/GBP flirts with the 200-day SMA
EUR/GBP is seen sliding back towards its two-month support line at £0.8419, ahead of Tuesday’s UK manufacturing and services PMI for May.
Below the support line meanders the 55-day SMA at £0.8403 and sits last week’s low at £0.8393 which, together with the early May low at £0.8368, is key for the currency pair’s uptrend. If slipped through, the technical picture would become bearish again.
For now, further sideways trading around the 200-day SMA at £0.8445 seems to be on the cards. Last week’s high at £0.8495 needs to be exceeded, for the late March high at £0.8512 to be back in focus. Further up sits last Monday’s high at £0.8534.
AUD/USD continues to rise post Australia’s Labor party election victory
AUD/USD continues to advance and is currently piercing through its two-month downtrend line at $0.7086 following Anthony Albanese’s victory in Australia’s elections. He will form the first Labor government in almost a decade and is only the fourth Labor leader since World War Two.
Ahead of Australian manufacturing and services Purchasing Managers Index (PMI) data the cross looks bid and is approaching its March low at $0.7166. Support below the early May low and 11 May high at $0.7053 to $0.7031 comes in along the one-month support line at $0.7008.
Only a currently unexpected drop through last Wednesday’s low at $0.695 would engage the 10 May low at $0.6911 below which the currency pair’s near two-year low can be spotted at $0.6829. In case of it giving way, the June 2020 trough at $0.6777 would be next in line.
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