FX snapshot

With the dollar doing its best to move higher we have seen GBP and EUR start to move downwards once again, giving back some of their strength from Friday. It’s a fairly quiet session to start the week, with little heavyweight data to keep markets on the move. 

A pound coin atop a dollar note
Source: Bloomberg

GBP/USD moving below $1.57

Friday’s attempt to break through $1.58 did not work out well for GBP/USD, and with the price now moving back below $1.57 it looks like the sellers are back in control. Some short-term support around $1.5630 is possible, while a continuation of the downward move would head towards $1.55. The risk for bears is that we witness a consolidation period similar to December, but this time ending in a break to the upside as the trend reasserts itself.

EUR/USD could slip to $1.1280

The $1.15 level is still the target here that EUR/USD must clear. Upward momentum is still strong, and the current pullback may just run into the rising trendline at $1.1370, before pushing on. A failure to hold this rising trend would see a drop towards $1.1280, around the 200-hour simple moving average (SMA).

AUD/USD decline persists

The pain continues for AUD/USD longs, with the $0.80 level being challenged in the morning session. The next target is the 200-hour SMA at $0.7900, with further downside targets at $0.7950, then the mid-May lows around $0.7880 and then the monthly lows at $0.78. We would need to see a move back above the $0.8050 area to restore bullish momentum.

USD/JPY could move through Y120

A morning bounce here has taken USD/JPY back to the descending trendline, with resistance around Y119.80. If this area continues to be resistance then the likelihood is another move back towards Y119, but a move through Y120 would raise the possibility that a breakout is underway. 

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