The euro remains rangebound as markets keenly await the ECB decision. Meanwhile, sterling weakness is the key move of late, with the services PMI set to put even more volatility into the mix.

Source: Bloomberg

EUR/USD range continues
EUR/USD continues to be largely rangebound in the lead up to today’s European Central Bank (ECB) meeting. As has recently been the case, we are looking at an upper boundary of $1.0641 and a lower boundary of $1.0558. The overall downtrend remains in play and any protracted upside would only be expected should we see price close above $1.0641.

However, until we see a clear break out of this range, it is likely to remain in play. Thus, this current selloff could turn to strength around the $1.0565-$1.0588 support zone. 

GBP/USD consolidates following selloff
GBP/USD saw a massive decline yesterday, initially instigated by a weak construction PMI. The hammer candle marked a bottom to the selloff, setting a new support level of $1.4894. Currently this price action looks like a short-term breather before another leg lower.

Quite simply, given such a strong selloff, it would have made sense to see a strong recovery. The absence of such a sharp move higher makes it seem as if bulls are few and far between for now and thus the bearish view remains.

A closed hourly candle above $1.4957 would signal the potential for further upside retracement, where the next key resistance level would be just below $1.500. However, until that happens, further losses seem likely, with $1.4894 and $1.4831 the next key levels. Be aware that the UK services PMI reading this morning could provide significant volatility.

EUR/GBP spike brings chance of further gains
The spike seen yesterday in EUR/GBP managed to break price through the key £0.7080 resistance level. This morning has seen some of that retraced, but the fact we saw that new high created means a more bullish outlook now prevails.

With price attempting to break back below £0.7080 this morning, we are now seeing a strong move higher within the current candle, meaning a possible bullish hammer. This would point to the pair turning back into the green soon, with £0.7100, £0.7110 and £0.7131 the next key resistance levels. Support levels of note are £0.7080 and £0.7053. Be aware of the UK services PMI and ECB meetings which will both move this pair heavily.

AUD/USD breaking out of channel
AUD/USD has been a standout performer this week, particularly on Monday and Tuesday. However, we have since seen a descending channel in play, retracing some of that initial move higher.

Price is currently breaking through the top trend line in this channel, which points towards a possible continuation of this uptrend. The key here is a closed hourly candle above $0.7336, which would point towards a bullish bias, with resistance levels of $0.7343 and $0.7351 in view.

However, until we do break $0.7336, there is a good chance of continuing this trend of lower highs and lows. Any move lower would look towards $0.7320, $0.7297 and $0.7284.

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