​​EUR/USD, EUR/GBP and AUD/USD on quiet Martin Luther King holiday trading

UR/USD loses upside momentum on US Martin Luther King Day

EUR/USD’s strong rally from its early January low at $1.0484 low remains on track to reach the late April 2022 high and the 50% retracement of the 2021 to 2022 descent at $1.0936 to $1.0940 as well as the psychological $1.10 mark over the coming weeks.

​However, on today’s Martin Luther King US holiday the cross is seen losing upside momentum, having briefly reached a new nine-month high just below the $1.09 mark. Support below the now breached January accelerated support line at $1.084 and the May 2022 peak at $1.0787 lies between the mid- to late December highs at $1.0736 to $1.0715.

EUR/GBP comes off its three-month highs ahead of Tuesday’s UK unemployment report

​Last week EUR/GBP briefly overcame its October to late-December as well as early-January highs at £0.8867 to £0.8877 by rising to $0.8897 before short-term consolidating as the British economy expanded by a better-than-expected 0.1% month-on-month in November.

​Ahead of Tuesday’s UK unemployment number, which is expected to come in unchanged at 3.7%, the cross is seen sliding back towards its December-to-January support line at £0.8822 as negative divergence can be spotted on the daily relative strength index (RSI). This happens when a new price high is not confirmed by a higher high on the oscillator, in this case the RSI, and points to likely consolidation.

​While the support line underpins, the cross remains in a medium-term uptrend. Slightly further down lies the £0.8783 early-January low. Only a currently unexpected rise above Friday’s high at £0.8897 high would push the minor psychological £0.90 mark back to the fore.

​AUD/USD trades in five-month highs as Australia MI inflation gauge hits four-month low

AUD/USD’s advance has taken it to above its minor psychological $0.70 mark, intraday so far to a new five-month high at $0.7019 as Melbourne Institute’s monthly inflation gauge showed a drop in Australian inflation to a four-month low at 0.2% in December 2022. The 9% slump in Australian building permits to a nine-month, month-on-month low at 13,898 units in November dampened bullish sentiment slightly with the cross retracing some of its earlier intraday gains.

​The fact that AUD/USD has been trading above its 200-day simple moving average (SMA) for over a week now - for the first time since April 2022 - is encouraging for the bulls with the $0.7136 August peak representing a possible upside target. Slips should find support between the January 2022 low at $0.6968 and last Monday’s high at $0.6949. Our medium-term bullish forecast will remain intact while no unexpected bearish reversal takes the currency pair below its current January low at $0.6688.