FX snapshot – US Dollar Index, GBP/USD, EUR/USD, AUD/USD

China GDP news is the main event on an otherwise quiet day, as FX markets take a while to move into full swing this morning. 

Euro and US dollar notes
Source: Bloomberg

Dollar Index finds support

The index is still down heavily for the month, but found support around $94.00 last week. Since then, the price has moved higher, but it seems that the area around $94.90/$95.00 will be the stumbling block. A breakout above here would reverse the declining trend, and potentially signal a move back towards $96.00. Sellers will need to see $94.00 break early on in the week to be in with a chance of retesting the August lows. 

GBP/USD's drive higher pauses

Cable’s mid-October bounce last week stalled around $1.55, and since then we have seen bullish momentum stall. However, support has come in around $1.5415, so a breakout from these two areas will be the key development to watch early on this week.

A push through $1.55 would head on towards the September high around $1.5650, while a further weakening of the price would push on to support at $1.5359, around the 200-hour SMA. Further declines take the pair onwards to rising trendline support around $1.5260. 

EUR/USD eyes $1.1380

This pair continues to bounce along the 200-hour SMA (currently $1.1352), although so far today it has yet to meaningfully challenge the $1.1380 area. In fact, any bullish move will have to break through this, plus the 50-hour SMA around the same level, and then push on through the 100-hour SMA at $1.14. Then it would be in a position to test the waters around last week’s high of $1.1480/$1.15. A drop through the 200-hour SMA would head towards support at $1.1240.

Chinese data lifts AUD/USD 

China’s GDP numbers helped the Aussie to recover overnight, with AUD/USD pushing back above the 200-hour SMA ($0.7275) and putting the October trend back into action. Now it needs to continue this move by pushing on through the 50-hour SMA ($0.7297) and testing last week’s high at $0.7350, followed on by the October high around $0.7380. A move back below the 200-hour SMA would see a test of support at $0.7229 and then the big level around $0.7195, when the price bounced strongly on 13/14 October.

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