EUR/JPY and EUR/GBP drop back, while AUD/USD slumps to a two-month low
Risk-off moves have continued in FX markets, with the Aussie dollar particularly hard-hit.
EUR/JPY sees further weakness
The EUR/JPY has declined for a second day, after peaking earlier in the week.
This short-term topping action might see further declines towards the ¥154.00 level, or below this towards the July low at ¥152.00. Continued risk-off moves in markets prompted by the US downgrade may see the pair weaken further, though the uptrend is still in place.
A revival above ¥157.00 would signal that a more bullish view prevails in the near-term.
AUD/USD slumps to two-month low
The declines have continued apace here and the AUD/USD now sits at its lowest level since the end of May.
The reversal from the highs of July is now complete and a test of the May lows seems almost inevitable. If $0.649 is breached then the $0.63 and $0.62 levels become the next to watch as possible support.
A revival above $0.66 would be needed to suggest that a modest recovery has begun.
EUR/GBP stalls
Wednesday’s EUR/GBP bounce stalled but the recovery from last week’s lows continues for now.
Additional gains would put the price on course to target the highs of mid-July around £0.868. Above £0.87 the potential for a trend change begins to loom.
Sellers will want to see a move back below £0.855 to open the way to a drop towards the July lows at £0.85.
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