Sterling continues to move higher, and while the Aussie is rallying too, it remains stuck in a downtrend.

Euro and dollar notes
Source: Bloomberg

GBP/USD heading higher
Yesterday’s dip below $1.45 brought out buyers and we are seeing the pair head back towards the highs of the week. Now it needs to clear the zone around $1.4620, and then press on to the early February high of $1.4668.

Dips may well continue to be bought, and it would take a move back below $1.42 to indicate that the April bounce has run its course. 

EUR/USD moves towards key resistance
For the moment the rally of the past week shows no signs of abating, although the pair is now rapidly heading towards previous key resistance at $1.1387.

A close above here will then result in a test of the $1.15 area, where gains stalled earlier in the month. Unless the price moves below $1.1260 we would continue to look for further upside, with dips providing potential entry points.

AUD/USD tries to recover
The pair has raced higher, but for now it merely recovers some of yesterday’s losses. A failure to move back above $0.77 would indicate that a turn lower is on the cards, with traders looking to sell into strength.

The 50-day SMA at $0.7526 may provide some support, but a break below this level would lead us on towards the April low around $0.77 itself.

USD/CAD heading lower
The downtrend continues, with rallies being sold, as we saw yesterday. Crucially, the price finds itself nearing the C$1.25 level, which was previously resistance in June of 2015 and may now be support.

A break below here would target the C$1.20 area, the low of May 2015. With the price having maintained a healthy distance from the 50-day simple moving average over the past few months, we would need to see this indicator broken on a sustained basis before considering even small long positions. 

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