FX snapshot – EUR/USD, GBP/USD, NZD/USD, AUD/USD

Short-term dollar weakness seems likely, yet long-term trend to return in near future.

GBP/EUR
Source: Bloomberg

EUR/USD bounces from key support to look relatively bullish
EUR/USD has managed to pull itself back from the brink, bouncing higher off the $1.0819 support level. This level had major significance as a daily close below it would signify the completion of a double top formation, thus leading to a projected target of $1.017. However, the move higher yesterday has seen a move above the key $1.0907 level, therefore pointing towards a possible recovery of sorts.

The 50-period simple moving average is clearly providing resistance for now and I am expecting to see the $1.0907 level form new support. Should that occur, it could provide the base for another leg higher. If price moves below that level, it could easily point towards a move back to $1.0819.

Personally, I think it looks likely that we will find support in the near-term and gain further ground. With that in mind, I am bullish for another leg higher as long as price remains above $1.0907.

GBP/USD bounces within broadening formation
This morning has seen the bounce higher within the current broadening formation I was looking out for yesterday. The descending trendline support in GBP/USD has now held on six occasion, yet becomes lower and lower. With the stochastic trendline break, there was an indicator that we could see this move higher and now we are here it looks like a move back to resistance of $1.567 seems highly likely. Given the entry into this formation, I remain bullish with regards to how we will exit it.

However, should price return to $1.567, it will be worthwhile taking stock and seeing how the candles respond to gauge whether price will remain rangebound or break higher. Thus I am bullish to $1.567 and I am bullish about in which direction we will leave this formation. Yet it is worth waiting for the actual breakout to then trade it.

NZD/USD breaks above trendline resistance
NZD/USD broke above the key $0.662 resistance level yesterday, which represented both the 7 July swing low and descending trendline. Price has since pulled back to the trendline and is now finding support upon it.

Given the long-term downtrend in play, I remain bearish yet am aware that another bounce could come if price fails to move below this trendline. Any move higher would likely come into resistance with the longer-term trendline dating back to 29 April. Even if that occurs, I would remain bearish unless price moves above $0.6771.

AUD/USD seeks to bounce higher following yesterday’s bounce
AUD/USD has managed to move above both the $0.74 and $0.744 resistance levels, which has brought about a more bullish short-term view. It looks like we are gradually exhibiting a rounded bottom and top.

Given the long-term trend in play, I remain bearish below $0.7533 and do see any rise as an opportunity to sell into. However, for now, it looks like we could see further marginal gains as long as price remains above $0.734.

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