EUR/USD, GBP/USD and AUD/USD gains may not last

EUR/USD, GBP/USD and AUD/USD are on the rise, with dollar weakness helping to boost these pairs. However, with wider bearish trends in play, these gains could be fleeting.

EUR/USD reversing upwards after recent decline

EUR/USD has started to regain ground in the wake of a sharp losses which took the pair into a fresh two-year low. That move saw the price engage, and initially break below, trendline support (dating back to November 2017).

However, we are now seeing the price rise once again, with the break through the $1.0975 bringing a new higher high. With that in mind, a period of upside looks likely, even if such a move is expected to provide a retracement of the wider sell-off from $1.1154.

Pound surges after commons vote

GBP/USD has seen sharp gains overnight, with the pound rising in response to a comprehensive loss for Boris Johnson in yesterday’s commons vote. Today we are likely to see the Prime Minister attempt to call a general election for October, with the Labour party’s response likely to be key in determining the direction for sterling.

The hourly chart highlights the recent rally into trendline resistance, with the pair closing in on Fibonacci resistance. The wider trend points towards a bearish move coming back into play before long, and it makes sense, therefore, to look for a potential reversal in and around the 61.8% and 76.4% Fibonacci levels. Ultimately, we are going to need a break through the $1.2310 peak to negate that bearish view, so a reversal looks likely until that happens.

AUD/USD continues to gain, but resistance lies ahead

AUD/USD has been regaining ground this week, with the Reserve Bank of Australia's (RBA's) rate decision and gross domestic product (GDP) both boosting the Australian dollar. This has taken the price through trendline resistance, as evident on the four-hour chart, with the price currently moving into the $0.6788 swing-high. A break through that level points towards further upside to come, yet it is worth recognising that we will need to see a much more significant level broken before we gain confidence of a wider rally for the pair.

The recent peak of $0.6822 is close to the major historical resistance levels of $0.6827 and $0.6831, dating back to January 2019 and June 2016 respectively. Therefore, there is a good chance that we are seeing the price move into a consolidation phase, with a break through that cluster of resistance required to bring about a wider bullish picture for the pair.

This information has been prepared by IG, a trading name of IG Markets 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.

Start trading forex today

Trade the largest and most volatile financial market in the world.

  • Spreads start at just 0.6 points on EUR/USD
  • Analyse market movements with our essential selection of charts
  • Speculate from a range of platforms, including on mobile

Live prices on most popular markets

  • Forex
  • Shares
  • Indices

Prices above are subject to our website terms and agreements. All share prices are delayed by at least 20 minutes. Prices are indicative only.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.