EUR/GBP and AUD/USD fall back while USD/CAD keeps rallying
Caution has been seen in EUR/GBP and AUD/USD, while USD strength is driving that currency higher versus the Canadian dollar.
EUR/GBP in retreat from last week’s highs
While EUR/GBP has recovered slightly this morning, the fall on Monday adds to the view that a lower high could be forming.
Thursday and Friday last week saw the index fail to hold its gains near £0.865. The price needs to clear this level in order to then target the £0.87 highs seen in late July.
Sellers will want to see a reversal back below the 50-day simple moving average (SMA) in order to renew the bearish view.
AUD/USD back on a downward path
The small rebound with AUD/USD of the past three sessions appears to have fizzed out.
After clambering its way off the lows of last week, the price failed to hold the $0.66 level on Friday, and Monday’s indecisive session has given way to steep losses today. This puts a move to the May lows around $0.65 into view. Below this could see a move down to $0.638, or even further, to the fourth quarter (Q4) 2022 lows.
A recovery above the $0.66 level would be needed to suggest that a low has formed for the time being.
USD/CAD rallies to two-month high
Dollar strength has driven USD/CAD to its highest level since early June.
The sustained recovery has resulted in the suspension of the downtrend for now, though a move back below C$1.335 and the July highs could yet provide the sellers with another bearish move.
Alternately, further gains could see the pair head on towards the 200-day SMA, and a clearance of that could put the buyers in charge once more.
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