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EUR/USD, GBP/USD and AUD/USD decline after yesterday’s sharp ascent

EUR/USD, GBP/USD and AUD/USD begin to retrace after the sharp upside seen yesterday.

​EUR/USD breaks through resistance to bring 18-month high

EUR/USD has managed to surge through the $1.1496 resistance level established back in March, with the price subsequently reaching the highest level since January 2019. This is just the latest leg higher in a long-lasting uptrend seen throughout the past three months.

With that in mind, further upside looks likely before long, as we look for this trend to continue. That bullish view holds unless we see the price break below the $1.137 support level. With the price starting to lose momentum this morning, there is a good chance we are going to see a retracement phase come into play before long. However, such a move would be deemed as a buying opportunity as long as we do not break into a new lower low.

GBP/USD reverses lower after recent gains

GBP/USD has started to reverse lower, following a period of sharp gains that took the pair through $1.2669 resistance. With the stochastic breaking below the 80 threshold, momentum is clearly bearish for the time being.

As such, further downside does look a distinct possibility over the short term. However, the uptrend seen throughout the past month is expected to come back into play before long, with the current pullback expected to provide a retracement before we move higher once more. As such, while we are likely to see further downside, it is worthwhile watching for Fibonacci support levels to potentially come into play.

AUD/USD surges into 14-month high

AUD/USD has managed to break through the crucial $0.7082 resistance level, bringing the pair into the highest level since April 2019. That bullish momentum is starting to wane this morning, with the pair turning sharply lower.

However, this is likely to simply be a reflection of the fact that we saw such a sharp move higher previously. As such, this pullback is expected to bring a buying opportunity, with a bullish outlook remaining in play until we see a break below the $0.6963. While we may not retrace into a deep Fibonacci level, support is likely to come around the previous resistance points of $0.7082 and $0.7064.

This information has been prepared by IG, a trading name of IG Australia Pty Ltd. 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.

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