EUR/USD and AUD/USD bottoming out, while GBP/USD hit by political developments
The euro has reached vital support, after steady losses in recent days, while AUD/USD is also looking to rebound. Meanwhile, sterling traders brace for the arrival of a new PM.
EUR/USD hits crucial support zone
EUR/USD finds itself in a vital zone of support, one that has held since mid-June. If the price can hold around $1.12, taking advantage of intraday oversold conditions, then a rebound towards trendline resistance at $1.125 may come into play.
The price needs to clear previous lower highs at $1.128, $1.13 and $1.132, however, to suggest a firm breakout is in play. A move through the $1.12 support zone and below $1.118 would reinforce the prevailing bearish view and bring the May low at $1.112 into view.
GBP/USD under pressure
While a new UK prime minister (PM) is appointed today, much of the news and speculation about a ‘no deal’ is already in the price for GBP/USD. Thus, the price may be able to rally in the short term.
Friday’s peak has created a new lower high, but the price has managed to stabilise around $1.245. A bounce from here would target $1.255, while further declines head back to $1.24. The prevailing trend is still lower, but if the price can establish a higher low then we may see some bullish pressure develop.
AUD/USD attempts to bottom out
A steady decline from yesterday’s high begins to suggest that the AUD/USD price is losing momentum, but oversold conditions might provide a bounce that saves the longer-term rally seen over the past month.
A recovery above $0.705 would provide a more bullish view and target $0.708, the highs from last week. A move below $0.70 is needed to cement a bearish view in the short term, to open the way to $0.697 and then $0.691.
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