EUR/USD, EUR/GBP and AUD/USD await this week’s plethora of rate decisions and economic data
Outlook on EUR/USD, EUR/GBP and AUD/USD amid rate decisions by the RBA, BOC and BoJ, Jerome Powell’s speech and Non-Farm Payrolls.
EUR/USD is seen heading back up again
EUR/USD continues its recovery from last week’s $1.0533 low ahead of a busy economic calendar and a slightly weaker US dollar despite US Institute Manufacturing Index’s (ISM) Services growth beating estimates on Friday and a modest China growth target of 5.0% (versus an expected 5.5%) being announced by its government over the weekend.
Resistance seen between the early and mid-February lows at $1.0655 to $1.0669 needs to be overcome for the early March high at $1.0691 to be reached. Above this level meanders the 55-day simple moving average (SMA) at $1.0719 which may also act as resistance.
Short-term the cross looks positive as a break out of Friday’s Harami candlestick pattern to the upside has been seen on Monday morning with the bullish bias remaining in place as long as no bearish reversal takes the currency pair below Friday’s low at $1.0589. Below it, the late February low can be spotted at $1.0533, ahead of the more significant $1.0484 to $1.0444 support zone which is made up of the mid-November high, early December and January lows.
EUR/GBP trades back towards the middle of its 2023 trading range
Last week’s EUR/GBP foray to its current March high at £0.8896 was short-lived with the currency pair slipping back towards the middle of its 2023 sideways trading range with it now hugging the 55-day SMA at £0.8832 as the UK/EU Windsor Framework is being looked at by various political parties in the UK.
Minor resistance can be found at Thursday’s £0.8857 low and more important resistance along the February-to-March downtrend line at £0.8883 which is currently being eyed on a stronger euro.
Only a drop through Friday’s low at £0.8827 would put the mid-February trough at £0.8804 back on the map, ahead of the late January low at £0.8763.
AUD/USD trades in a low volatile sideways movement
AUD/USD remains below its 200-day SMA at $0.679 as Australia’s Melbourne Institute’s inflation rate rises for the sixth month despite strongly easing to 0.4% in February, ahead of Tuesday’s Reserve Bank of Australia (RBA) March policy meeting at which a 25-basis point (bp) rate hike is expected to take interest rates to an over a decade high at 3.6%.
The October-to-March uptrend line at $0.671 continues to underpin while the 200-day SMA caps, together with the February-to-March downtrend line and mid-February low at $0.6807 to $0.6812.
A fall through last week’s low at $0.6696 and the next lower January trough at $0.6688 would push the $0.663 December low back to the fore.
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