GBP, USD and EUR Analysis Ahead of Data Heavy Day.

The US dollar, measured by the DXY index, marked its fourth consecutive decline on Tuesday, falling below the 103.00 threshold to its lowest level since early August. The drop was attributed to a retreat in US Treasury yields, reflecting a shift in market sentiment towards a more dovish stance on US interest rates. Federal Reserve Governor Christopher Waller’s unexpectedly dovish remarks further fueled this sentiment, suggesting potential rate cuts if inflation continues to ease.

In response, the euro, British pound, and Australian dollar made significant gains against the weakening greenback, breaching key exchange rate levels. This article delves into the technical outlook for EUR/USD, GBP/USD, and AUD/USD, considering market sentiment, price dynamics, and chart formations.

GBP/USD has experienced a bullish trend in November, surging by nearly 4.5%. Despite reaching its highest level since late August, the pair faces resistance at the 61.8% Fibonacci retracement of the July/October decline (1.2720). A breakthrough could boost sterling sentiment, leading to further gains towards 1.2850. However, caution is advised as the pair approaches overbought territory.

EUR/USD continued its upward momentum, surpassing Fibonacci resistance at 1.0960 and reaching a three-month high. If the pair maintains support near 1.0960, there’s potential for an upward move towards 1.1080 after consolidation. Bullish momentum might target 2023 highs near 1.1275. Conversely, a breach of 1.0960 could lead to a decline towards 1.0840, with further weakness risking a retreat to the 200-day simple moving average around 1.0760.

*All rates shown are indicative of interbank rates and should only be used for indication purposes only. It is important to note that foreign exchange rates fluctuate and that rates may vary depending on the amount and the base currency that is purchased or sold. Rates are correct as of 8:00am UK time. CentralFX are not responsible for the rates shown.