EUR/USD and AUD/USD reverse Tuesday’s US dollar gains while EUR/GBP looks toppish
Outlook on EUR/USD, EUR/GBP and AUD/USD amid European inflation readings and China planning to resume Australian coal imports.
EUR/USD recoups some of Tuesday’s sharp losses on lower-than-expected inflation readings
On Wednesday morning EUR/USD seems to be on track to recoup most of Tuesday’s sharp losses as France joins Germany by publishing lower-than-expected inflation data.
The preliminary annual consumer price index (CPI) in France slid to 5.9% in December versus a forecast 6.4% and dropped by 0.1% on a month-on-month (MoM) basis in December versus a 0.3% rise in November. The cross is fast approaching its 22 December high at $1.0659 while targeting the mid- to late December highs at $1.0715 to $1.0736 which represent good resistance.
This technical view will remain intact while Tuesday’s low at $1.052 holds on a daily chart closing basis. Intraday support above this low can be spotted around the 22 December $1.0574 low.
EUR/GBP comes off its October peak
EUR/GBP's over 3% December rise faltered slightly above the October peak at £0.8867 at the end of December high of £0.8877 with the currency pair slipping ahead of this week’s UK final services purchasing managers index (PMI) and Halifax house price data while European inflation data came in lower-than-expected.
Tuesday’s low at £0.8783 remains in focus, a fall through which and the £0.878 21 October high could lead to a slide back towards the 55-day simple moving average (SMA) at £0.87 taking shape. Good resistance can now be found at the £0.8828 November peak, above which the October and late-December highs can be spotted at £0.8867 to £0.8877.
Only a rise and daily chart close above the recent high at £0.8877 would push the minor psychological £0.90 region back to the fore.
AUD/USD resumes its ascent as China plans to resume Australian coal imports
AUD/USD has not only regained all of Tuesday’s sharp losses but has managed to rise and close on a daily basis above its 200-day SMA for the first time since April 2022 on news that China is planning to reverse a two-year ban on imports of Australian coal.
The cross had been capped by the 200-day SMA in May, June, August and December of last year and the fact that a daily close above it has now been made indicates that further upside to above the $0.6893 December peak is in store. The resumption of the over 10% advance from its October low has the mid-September high at $0.6916 and also the January 2022 low at $0.6968 as well as the late-August high at $0.7009 in its sights.
This forecast remains valid while no unexpected bearish reversal takes the currency pair to below its current January low at $0.6688. Minor support above this low comes in along the 200-day SMA at $0.6853 and at the $0.6801 28 December high.
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