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

Prevailing US dollar weakness continues to make life easy for other currencies, with strong moves in key risk gauges such as USD/CAD and AUD/USD still underway. 

Five and ten pound sterling notes in a pile
Source: Bloomberg

Cable could see more gains

Friday’s session saw sterling continue to hold up against the US dollar, making a new higher low on the day that indicates more gains are on the way. The area around $1.5380 is likely to prove problematic, but so long as the price remains above $1.53 and also above the 50-hour SMA ($1.5331) then I expect further gains for this pair. Support is possible around $1.5250 should the price weaken, with a close below possibly indicating that the October move higher will retrace and revisit $1.5150.

EUR/USD moves closer to September high

The $1.1390 level marks the high watermark for the pair so far this month, with progress above here noticeably absent so far. The $1.1458 level is the real target, the high from 18 September, with downside targets lying around $1.1288 and then $1.1240. A real breakout through the September high would see the pair target the 24 August high at $1.1670.

USD/CAD bears still in control

It has been a one-way journey in this pair so far in October, finally ending the steady grind upwards that characterised previous months. The advantage almost certainly still lies with the bears here, with the C$1.29 area providing only some support. A daily close below here would push on to the 200-day SMA at C$1.2630, although with the daily RSI now oversold a bounce of some kind cannot be ruled out. Nonetheless, the trajectory here is still downwards.

AUD/USD momentum with buyers

The Aussie continues to move higher, making new multi-week highs today. The bounce off the $0.7180 area last week was a clear sign that momentum remains with the buyers, with a target in the area of $0.7390/$0.74. A move back below $0.7220 is needed to invalidate the bullish outlook, with targets in the area of $0.7180and then on down to $0.7133. 

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