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

The US dollar has found new life, helped by Janet Yellen’s hints that December is a very real possibility for a rate hike by the Federal Reserve.

Janet Yellen holding her glasses
Source: Bloomberg

GBP/USD slips following Yellen comments

With cable back below $1.54 it looks like we may be seeing the beginning of a major move lower, but first the sellers need to push us back below $1.5360, where the declines have been stemmed all the way through this week. A move through there is needed before the sellers really have the upper hand. Should this occur, then the $1.5313 and then $1.5266 levels become the areas to watch for support. A break back above $1.54 needs to clear $1.5450 to avoid simply replicating the consolidation that has prevailed this week.

EUR/USD off lows but could fall further

More losses were the order of the day for EUR/USD yesterday, but for now the pair is off the lows. Continued moves to the downside target $1.0769, with some support possible around the July lows at $1.0808. If the pair does bounce then the first area of resistance is $1.0938, followed by the $1.11 area. With the US dollar in vogue once again thanks to Janet Yellen yesterday, the most likely course still seems downward.

AUD/USD decline continues

The $0.7220 level was the key area of resistance earlier in the week, with a failure to break through here sparking a drop that continued yesterday and looks to be continuing today. A move through $0.7120 would clear the way towards the lows of late October around $0.7060. Buyers need to get the pair back above $0.7180 to consider a more bullish stance, with the most important element being a break back through $0.7220. 

USD/JPY targets ¥122.80

Steady gains have been the norm here over the past three days, with a particularly elegant trend in place since early Tuesday morning. The pair has pushed through yesterday’s high, but needs really to move on through ¥121.82 to confirm this development. Upside targets now lie around ¥122.20 and then ¥122.54, with a break above here meaning that we are likely to test the August highs around ¥125. It would need a move back below ¥121 to suggest the bounce has run its course. 

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