EUR/USD drops to nine-month low, AUD/USD to near eleven-month low while EUR/GBP keels over
Outlook on EUR/USD, EUR/GBP and AUD/USD as baked in ‘rates higher for longer’ scenario pushes greenback close to ten-month highs.
EUR/USD drops to nine-month low
A rising US dollar and yields as investors fully realise that rates are staying higher for longer with rate cut expectations being pushed back to the back end of next year have forced EUR/USD lower to a nine-month low.
The mid-November high, early and December low and January trough at $1.0484 to $1.0444 offer support which is likely to hold, at least in the short term. Below it lies the August 2022 high at $1.0368.
Initial resistance comes in at the $1.0516 March low and further resistance at Thursday’s $1.0617 low and more important resistance between the May low and mid-September low at $1.0632 to $1.0636.
EUR/GBP falls short of the 200-day simple moving average
EUR/GBP flirted with its £0.8701 July peak since last week but fell just short of the next higher 200-day simple moving average (SMA) at £0.8711 before keeling over and falling back to the £0.8658 June high.
A medium-term top is thus likely in place with the September support line at £0.8622 as well as the late-August high at £0.861 likely to be revisited in the near future, provided that this week’s high at £0.8706 isn’t overcome.
Minor resistance below this level can be spotted at the £0.8669 August high.
AUD/USD drops to near eleven-month low
The appreciating US dollar continues to push AUD/USD lower with it having dipped to a near eleven-month low at $0.6332 on Wednesday before recovering overnight.
The mid-August low at $0.6365 is currently being probed, above which minor resistance sits at the 21 September low at $0.6385. While the cross remains below its $0.6511 to $0.6522 late-August and current-September highs, the downtrend remains intact.
A fall through $0.6332 would probably engage the $0.6273 November 2022 low ahead of the $0.6171 October 2022 trough.
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