EUR/USD and GBP/USD bounce off multi-decade lows while USD/CAD tops out
EUR/USD, GBP/USD and USD/CAD pause their recent trends.
EUR/USD bounces off 20-year lows ahead of ECB rate decision
EUR/USD is in recovery mode ahead of Thursday’s European Central Bank (ECB) meeting and possible 75 basis point (bp) rate hike to 1.25%, having dipped to a 20-year low below the 99 cents mark earlier in the week on the back off Gazprom indefinitely shutting down the Nordstream 1 pipeline.
The cross has breached its one-month downtrend line at $0.9977 and seems to be gunning for its last reaction highs on the daily chart – a high made above that of the previous and the following day – which were made in late August at $1.0079 to $1.0089. Together with the late July low at $1.0097 these are likely to cap any further upside this week, though.
Minor support below the breached one-month downtrend line can be found at the $0.9901 23 August low. From a medium-term technical perspective, the cross remains under pressure while it stays below its late August high at $1.0089.
GBP/USD briefly dipped to 37-year low
The announcement of the new UK prime minister Liz Truss’ election by her conservative party members pushed GBP/USD to levels last seen in 1985 as market players worry about how her proposed energy price cap and other economic policies which will add eye-watering amounts to the UK’s debt burden will affect the pound sterling.
After initial falls close to the $1.14 mark, the cross managed to stabilise and heave itself back above $1.15. It remains immediately under pressure, however, while it trades below this week’s high at $1.1609 and within its clearly defined downtrend channel.
GBP/USD has been trading in its downtrend channel for the past month, the upper resistance line of which comes in at $1.1586.
USD/CAD stalls post BoC rate hike
USD/CAD short term topped out at C$1.3209 following the Bank of Canada’s (BoC) decision to raise rates by 75 bp to 3.25% on Wednesday, having risen from its C$1.2728 11 August low by close to 4%.
A retracement back towards its early September low, 23 August high and one-month uptrend line at C$1.3075 to C$1.3054 is now on the cards with this area expected to offer support, at least short-term.
Immediate resistance above today’s intraday high at C$1.3138 can be found at the 5 September C$1.3173 high with key resistance remaining to be seen between the July and early September highs between C$1.3208 and C$1.3223.
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