EUR/GBP and AUD/USD slip as GBP/USD remains bid amid falling greenback
Outlook on EUR/GBP, GBP/USD and AUD/USD amid strengthening British pound, weakening greenback and falling gold price.
EUR/GBP slips to £0.86 region
EUR/GBP’s drop from its £0.8714 December high has taken it all the way back to £0.8587 with the 15 December low at £0.8572 representing the next downside target ahead of the December low at £0.855 amid re-assessed rate cut expectations in Europe and the UK. The European Central Bank (ECB) is expected to cut its rates earlier than the Bank of England (BoE), hence the slide in the cross.
Minor resistance sits at Monday’s £0.8621 high and Friday’s £0.8634 high.
GBP/USD on track for fifth consecutive day of gains
GBP/USD’s bullish reversal from its two-week low at $1.2611, seen last week amid the publication of US Non-Farm Payrolls, took it to Friday’s high at $1.2771 which remains in sight as the greenback continues to weaken amid falling US Treasury yields. A rise above $1.2771 would engage the mid-December high at $1.2794 and the December five-month peak at $1.2828.
Immediate upside pressure should remain in play while Monday’s low at $1.2674 underpins. Below it lies the November-to-January uptrend line, 21 December and current January lows at $1.2632 to $1.2611 which so far offered good support.
AUD/USD hovers above last week’s one-month low
AUD/USD’s correction lower from its five-month December peak at $0.6871 to last week’s $0.6641 low amid a falling gold price has been followed by an attempt to stabilize. Overall downside pressure seems to retain the upper hand, though, and a fall through $0.6641 would likely lead to the October-to-January uptrend line, 200- and 55-day simple moving averages (SMA) at $0.6603 to $0.6584 being revisited.
Minor resistance above Monday’s $0.6734 high lies at Friday’s $0.6748 high which needs to be exceeded for at least a minor bullish reversal to gain traction.
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