EUR/GBP heads higher and AUD/USD slumps, while oil weakness boosts USD/CAD
Sterling has struggled against the euro despite the BoE’s rate hike, while the Aussie is under firm pressure against the greenback. The dollar has rallied against its Canadian counterpart.
EUR/GBP rebounds towards 200-day MA
The Bank of England’s (BoE) rate hike did not deliver further gains for sterling, and instead the price has rallied sharply with EUR/GBP.
However, this comes after a sharp move lower from late-April, and it is now challenging the £0.8733 support zone as well as the 200-day simple moving average (SMA). A recovery above here might help to reverse the bearish view.
Alternately, a failure to move higher could see further selling momentum develop and result in a fresh test of the £0.866 level seen on Thursday.
AUD/USD slump deepens
A sharp reversal on Thursday with AUD/USD, accelerated by weakness in commodity prices, seems to have negated any hope of a break higher for now.
Once again a combination of the 100-day SMA and the $0.68 level has knocked back the price after a recovery. A move back to $0.66 could now be in the offing, and might result in a move that breaks this level and leaves the price at risk of a much deeper retracement. The next big level to watch is the October low, down around $0.625.
Bulls will need an impressive recovery that can take out $0.68 as a means of opening the path to further upside.
USD/CAD heads towards C$1.35
Oil’s weakness has played a part in rekindling the hopes of a rally here with USD/CAD, after the price dipped towards C$1.33 and hit a one-month low earlier in the week.
The move back above the 200-day SMA helps to suggest the buyers may mount another attempt to put the price back on an upward footing and revive the longer-term trend. This targets C$1.367, and then on to C$1.377.
A reversal below C$1.33 hands the sellers the upper hand once again.
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