EUR/USD and AUD/USD slump, while GBP/USD holds above recent lows for now
Fresh risk-off moves have seen EUR/USD and AUD/USD fall back, but the pound is holding up against the dollar for now.
EUR/USD back under pressure
Hopes of a rebound with EUR/USD have been dashed in early trading, as the pair reverses course on yesterday’s gains and revives the bearish short-term view.
The next area to watch becomes the March lows around $1.054, where the price stabilised almost three months ago. A move below this would continue to undermine the medium-term bullish view.
Bulls will still be watching for a move back above $1.075 to suggest once more that a higher low might be created.
GBP/USD still holding above recent lows
GBP/USD has eroded around half of yesterday’s gains, but unlike EUR/USD it is still holding above last week’s lows.
This still gives some hope that a higher low is being created and that a new leg higher may develop. For this bullish view to gain further strength we would need to see a move back above the 50-day simple moving average (SMA) and $1.245, plus a bullish moving average convergence/divergence (MACD) crossover on the daily chart.
A drop back below $1.235 could signal another attempt to push towards the 100-day SMA is in progress.
AUD/USD hit by poor Chinese data
Stronger inflation figures that might open the way for another Reserve Bank of Australia (RBA) rate hike were countered by more poor Chinese data, resulting in fresh losses for AUD/USD.
Last week’s lows are being breached, which points towards a resumption of the declines in place since the early part of the month. The $0.6385 zone becomes the next area to watch on the downside, and then below this $0.627, last seen in early-November 2022.
A recovery above $0.656 might provide the foundation for a move back towards the 50-day SMA, though it will need to negotiate the $0.659 zone that provided support in March and April.
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