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EUR/USD, EUR/GBP and USD/CAD try to stabilise ahead of long weekend

​​Outlook on EUR/USD, EUR/GBP and USD/CAD amid ongoing US debt ceiling negotiations and as Germany entered a recession on Thursday.

Source: Bloomberg

​​​EUR/USD trades in two-month low as Germany entered a recession

EUR/USD’s decline has taken it to a new two-month low on flight-to-safety flows into the US dollar amid US debt ceiling worries and as Germany officially entered a recession on Thursday.

​The currency pair is flirting with the 24 March low at $1.0714, below which sits the early-March high at $1.0695.

​Resistance remains to be seen at last week’s $1.076 low and then around the $1.0789 early April low. While the next higher 10 April low at $1.0832 isn’t overcome, downside pressure should remain in play.

EUR/USD chart Source: IT-Finance.com
EUR/USD chart Source: IT-Finance.com

​EUR/GBP holds despite Germany entering a recession

EUR/GBP’s slide to levels last traded in December of last year, to £0.8649, has been followed by another minor recovery rally back towards the middle of its recent sideways trading range.

​The cross is still trying to head back up towards this week’s high at £0.8719, above which beckons the 200-day simple moving average (SMA) at £0.8751 which a couple of weeks ago acted as resistance and may do so again.

​Above it the late-February low at £0.8755 may also stall an attempt of a move higher taking place, together with the early-May low at £0.876. Minor support can be noticed between 11 and 19 May lows at £0.8669 to £0.8662 and major support at this week’s £0.8649 trough.

EUR/GBP chart Source: IT-Finance.com
EUR/GBP chart Source: IT-Finance.com

​USD/CAD falters close to its April peak

USD/CAD’s advance on a stronger greenback, due to flight-to-quality flows on the back of ongoing US debt ceiling negotiations, ran out of steam slightly below its C$1.3668 late-April peak.

​A slide back towards the mid-May high at C$1.3568 may thus be in store. Below it more significant support can be seen between the 10 April high, 55-day SMA and one-month uptrend line at C$1.3553 to C$1.3527.

​Were a currently unexpected advance to above the C$1.3668 high to unfold, the late-March high at C$1.3804 would be back in the frame.

USD/CAD chart Source: IT-Finance.com
USD/CAD chart Source: IT-Finance.com

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