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CFDs are complex financial instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money. CFDs are complex financial instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.

EUR/USD, GBP/USD and AUD/USD likely to reverse back into trend

EUR/USD, GBP/USD and AUD/USD gains could come under pressure as we await breakout from consolidation or downward trends.

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​EUR/USD consolidation continues after rebound from key support

EUR/USD declines seen yesterday morning provided an ultimate rebound from the notable $1.119 support level. The pair has been largely consolidating over the past three weeks, failing to find traction in either direction.

Ultimately, we need to see the price break through either $1.1353 (bullish) or $1.1168 (bearish) to bring about a more confident directional bias.

EUR/USD chart Source: ProRealTime
EUR/USD chart Source: ProRealTime

GBP/USD rallies into resistance zone

GBP/USD has managed to surge through Monday's high of $1.2397, to bring a bout a fresh high for the week. While that rally does provide a new higher high, there is a good chance that we are simply retracing the decline from $1.2543, with the price having recovered to the 50% Fibonacci retracement level at $1.2397 thus far.

With the price trading around Fibonacci and trendline resistance, a break through this point would signal a potential rally into the deeper 61.8%-76.4% Fibonacci zone. However, with a clear bearish trend in play, such a move would be viewed as a precursor to further downside unless $1.2543 is broken.

GBP/USD chart Source: ProRealTime
GBP/USD chart Source: ProRealTime

AUD/USD starts to weaken from trendline resistance

AUD/USD has rallied into trendline resistance following a breakout from a week's worth of consolidation. That rally provides us with yet another higher low, yet the wider trend of lower highs also remains in place until we see the $0.6974 level broken.

With that in mind, there is a good chance we will see the pair turn lower once more before long. As such, this tightening consolidation looks likely to hold until we see a break through either $0.6814 or $0.6974.

AUD/USD chart Source: ProRealTime
AUD/USD chart Source: ProRealTime

This information has been prepared by IG, a trading name of IG 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.
CFDs are a leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your initial deposit, so please ensure that you fully understand the risks involved.

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