Bids across the board for the greenback
The dollar is continuing its solid push higher over the past week as we are seeing a couple of technical plays come into play at the moment:
- GBP/USD having broken below its July low in trading yesterday and accelerating a downside push below 1.3500, with potential for a drop towards 1.3200
- EUR/USD falling to its lowest levels since November upon a break below the August lows, with sellers now setting their sights on key support near 1.1600
- AUD/USD erases gains for the day in a drop back from 0.7250 to 0.7225 and testing the near-term swing region support around 0.7220-30 currently
Elsewhere, USD/JPY is also off earlier lows of 111.22 to 111.42 at the moment despite Treasury yields keeping lower on the day as bond sellers take a bit of a breather.
Looking at GBP/USD, the pair seems poised for a further drop as the technical outlook isn't pretty whatsoever at this point in time. The dollar is in charge but the pound side of the equation is also not too helpful amid the ongoing UK fuel shortage.
Meanwhile, EUR/USD is a pivotal one to watch as the pair hits lows of 1.1641 on the day and inches closer towards key support at 1.1600.
As mentioned earlier, the drop below the August low in the pair may set off broader dollar bids and that seems to be the case now. A further drop below 1.1600 will exacerbate the situation even further, especially if we do see USD/JPY also race towards 112.00.
As for AUD/USD, the pair has found comfort from near-term support around 0.7220-30 since last week so an extension below that region could see added downside pressure back towards the August lows around 0.7106 next.
