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EUR/GBP capped by October peak while AUD/USD resumes its descent

​​Outlook on EUR/GBP and AUD/USD amid low volume trading into year-end.

AUD/USD Source: Bloomberg

​​​EUR/GBP remains capped by its £0.8867 October peak

EUR/GBP's over 3% December advance faltered slightly below the October peak at £0.8867 earlier this week. It has capped the cross since then during low volume trading into year-end ahead of EUR M3 Money supply for December which is expected to come in at 5.0% year-on-year versus 5.1% previously.

​While this week’s and the October high at £0.8863 to £0.8867 continue to cap on a daily chart closing basis, the one-month support line at £0.8817 is expected to be revisited. While the next lower Wednesday trough at £0.8795 underpins, however, the currency pair remains in a clear uptrend on the daily chart but has encountered strong resistance.

​Only a rise and daily chart close above the October high at £0.8867 would push the minor psychological £0.90 region back to the fore.

EUR/GBP chart Source: IT-Finance.com
EUR/GBP chart Source: IT-Finance.com

​AUD/USD resumes its descent

AUD/USD over 10% rise from its October low ended abruptly in mid-December when the cross formed a top at $0.6893 before slipping to last week’s low at $0.663 as the US dollar regained some lost ground on flight-to-safety flows as investors worried about a global recession rearing its head.

​Since then, AUD/USD tried to rise again but on Wednesday ran out of steam at $0.6801 and this Thursday is seen sliding back towards the October-to-December uptrend line at $0.6705 with further short-term downside likely to be in store.

​The 7 December low at $0.6669 represents another downside target for this week ahead of the recent low at $0.663. Immediate resistance can be spotted at the 22 December $0.6767 high, ahead of this week’s $0.6801 peak.

AUD/USD chart Source: IT-Finance.com
AUD/USD chart Source: IT-Finance.com

This information has been prepared by IG, a trading name of IG Markets Ltd and IG Markets South Africa Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

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