FX snapshot: Dollar Index, GBP/USD, AUD/NZD. GBP/AUD

Dollar strength is coming back to the fore this week, while AUD/NZD continues to trend within a consistent falling channel.


US dollar index pullback likely to be short-lived
The dollar index is pulling back this morning, following a move up towards the 100% Fibonacci expansion. However, there is a clear uptrend in place over the past week which makes me confident that price will move higher again as long as it remains above 96.75.

Two possible support levels to watch out for are 96.93 and 96.87, which are deprived from a Fibonacci expansion and retracement.

GBP/USD spikes back into resistance zone
This morning’s CPI number has pushed GBP/USD back into the resistance zone (15,652.3-15,690) following a selloff into moving average support yesterday.

The same rule applies as the last time and that is an expectation of another move lower as long as price remains within this zone. 

AUD/NZD moving back towards 1.11
AUD/NZD is continuing to move lower from the upper end of the descending channel. This pair has been a very consistent performer when moving from one end to the other of this formation. Thus I expect further downside towards 1.11, which if broken would point towards 1.1.

Be aware of the cluster of simple moving average support (100- and 200-) between $1.1141 and $1.1159. However, any bounce would be likely to be short-term.

GBP/AUD seeking to push back into the bullish primary trend
GBP/AUD is pushing above the key near-term resistance following a bounce from $2.1094 support. The long-term trend is clearly bullish and it’s a case of watching for a signal that this trend is going to continue.

This morning’s UK CPI number has seen price break to new higher high above $2.1286 and thus I am now expecting a move back towards the $2.1528 high.

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