US dollar strength sees euro hit a seven-month low, with the Aussie and sterling also slipping. 

Australian dollar notes
Source: Bloomberg

EUR/USD hits seven-month low

The resurgence in EUR/USD was short-lived, with Friday seeing the bears return once more to push the EUR/USD back down towards the seven-month low that has been hit early this morning. The downtrend is clearly back in play, and thus the drift higher we are seeing currently is likely to be short term before we see the price sell off once more. The next major support zone comprises of the March and April lows of $1.052 and $1.0462. However, in the meanwhile this move higher could find resistance at $1.0640 or $1.0667. This bearish view holds unless the price closes above $1.0708.

GBP/USD breaks key support

The GBP/USD resurgence appears to be over for now, with the pair selling off heavily throughout Friday and subsequently this morning. The key here is the break below $1.517 and $1.5155. Given that the price has now broken below those levels, the pair looks like it will move back towards the bottom of the three-month falling wedge. The next major support level is $1.5107 followed by $1.5026. This bearish view holds unless the price closes above $1.5178.

EUR/GBP consolidates

The EUR/GBP downtrend remains well intact, and given the downtrend coming into this sideways price action, the resolution seems highly likely to be towards the downside. This current four-day range is trading within the £0.7025-£0.6982 boundaries and thus a close above or below these levels could act as a signal that the next move is imminent. However, given that we are in this downtrend, any upside breakout would also need to close above £0.7038 resistance. However, a close below £0.6982 would subsequently look towards the major £0.6950 and £0.6936 support zone (July and August lows).

AUD/USD drops out of uptrend

The AUD/USD uptrend has been well and truly undermined, with the price breaking below the $0.7183 support overnight. However, we have seen the price bounce from the crucial $0.7159 support level, with a long lower shadow. On the upside, the $0.7183 level is now providing resistance. Thus for any further downside, we would need to see a break and close through either of these levels. A close above $0.7183 would point towards $0.72 and $0.7214 as the next resistance levels. However, a close below $0.7159 would look towards $0.7141 as the next support level.

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