EUR/USD and EUR/GBP remain bid but AUD/USD stalls
EUR/USD and EUR/GBP remain quietly positive while AUD/USD consolidates ahead of RBA’s rate decision.
EUR/USD still flirts with the 55-day simple moving average
EUR/USD recovery from last week’s low at $1.0628 has taken it back to the 55-day simple moving average (SMA) at $1.0743 amid quiet trading due to many European countries enjoying a long Pentecost Monday weekend. Last week’s strong US Non-Farm Payrolls (NFP) data bolstered the US Federal Reserve’s (Fed) aggressive monetary tightening to try to combat soaring inflation which pushed the EUR/USD cross lower.
As long as last week’s low at $1.0628 underpins, however, overall upside pressure is expected to be maintained ahead of Thursday’s European Central Bank (ECB) policy meeting and Friday’s US consumer price index (CPI) data with the currency pair’s one-month high at $1.0787 remaining in sight.
First, though, EUR/USD needs to break through the March low and February-to-May downtrend line at $1.077. Above $1.0787 sits the late April high at $1.0936. Minor support continues to be seen along the one-month support line at $1.069.
EUR/GBP continues its ascent
EUR/GBP gradual ascent from its late May low at £0.848 has reached the £0.8587 to £0.8618 resistance area which so far caps the cross as investors return after a prolonged Queen’s Jubilee weekend ahead of UK BRC-KPMG Retail Sales Monitor (RSM) retail sales monitor and Halifax house price index data, out Tuesday and Wednesday respectively.
Were the May peak at £0.8618 to be exceeded, the July and September 2021 highs at £0.8658 to £0.8669 would be targeted next.
Minor support below Friday’s low at £0.8541 can be spotted at the late May high at £0.8529.
AUD/USD pauses advance ahead of RBA meeting
AUD/USD dropped back from last week’s one-month high at $0.7283 as better-than-expected US NFP bolstered the US dollar, practically taking the cross back to its one-month uptrend line at $0.7183 earlier today, ahead of tomorrow’s Reserve Bank of Australia (RBA) rate decision.
The cross is currently hovering above last week’s low at $0.7141 whilst remaining below Friday’s $0.7283 peak as traders await tomorrow’s rate hike which is widely expected to come in at 25 basis points (bps), though some analysts expect a larger 40 bps increase.
From a technical point of view the cross seems to be struggling around the $0.7266 early May high. A slip trough last week’s low at $0.7141 would most likely lead to the 23 May high at $0.7127 being reached and probably also the $0.7053 to $0.7036 support zone which contains the early May low, 11 May high and 25 May trough. Were a rise and daily chart close above the current one-month high at $0.7283 to be made, however, the early March and late April highs at $0.7441 to $0.7458 would be in focus.
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