EUR/USD and EUR/GBP in focus ahead of ECB decision, while AUD/USD rallies following Fed decision
The Fed's decision pushed the dollar lower, lifting AUD/USD, but the euro is now firmly in focus as we await the ECB’s latest rate decision.
EUR/USD holding up well ahead of ECB decision
EUR/USD has edged higher in early trading, but caution abounds ahead of the European Central Bank (ECB) meeting.
A higher low appears to have been established this week, and daily stochastics have turned higher again. A more hawkish ECB meeting today could bolster this bullish view. Further gains target the mid-July highs around $1.125, and potentially higher.
A close below $1.102 would be a bearish development and indicate a deeper retracement towards the 50-day simple moving average (SMA).
EUR/GBP edges down
The euro has registered some small losses against sterling this morning with EUR/GBP, continuing the downward move that began mid-month.
Further declines target the £0.85 zone once again, and then below this fresh lows in the current downtrend would be created. A longer-term move down targets £0.84, not seen since August 2022.
Should the ECB prove to be more hawkish, which could well give the euro a lift, then the pair may rally back above the 50-day SMA, and this might then provide the strength to head back towards last week’s highs around £0.869.
AUD/USD rallies after Fed meeting
Last night’s Federal Reserve (Fed) meeting provided AUD/USD with the strength to move higher, although it proved unable to hold on to all its gains.
Nonetheless, the price continues to carve out a higher low after bouncing from the 200-day SMA earlier in the week, and a close above $0.683 is now the next hurdle for bulls to clear. This would then leave the price free to target the June and July highs around $0.689.
The bearish view would need a close below the 200-day SMA and also back below trendline support from the June low to move into the ascendant once again.
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