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EUR/USD and GBP/USD have seen recent losses, raising the chances of a wider breakdown. Meanwhile, a wedge breakdown for AUD/USD is also growing more likely, thanks to a fall below trendline support.
EUR/USD managed to break lower from its consolidation yesterday, coming off the back of a rally into the 50% retracement and 200-day simple moving average (SMA).
However, given the mixed signals seen in a wider context (higher highs and lower lows), we need to see a break below $1.1432 to provide a more bearish outlook for the pair. Until then, there is a chance we could be retracing. Whether or not the price reacts to the 76.4% retracement at $1.1477 will go some way to telling us whether we are retracing or due to break further to the downside.
GBP/USD has managed to break below the $1.3098 support level, bringing about expectation of further downside from here. Given the failure to create a new high above $1.3299, there is a distinct possibility that we are going to see a further breakdown.
However, a break below the $1.2922 level would provide a much more reliable sell signal for the medium term. Until that happens, there is still a distinct possibility of a retracement of the rally from $1.2922, as seen in late September. Thus, short-term losses seem likely, yet a break below $1.2922 would be required to negate the notion that this could be a retracement.
AUD/USD looks to have broken down from its recent rising wedge pattern, with the break below $0.7112 providing a signal of potential impending downside from here.
An impressive fall in unemployment helped the pair rebound overnight, yet this has simply found resistance on the ascending trendline. As such, a bearish outlook is in play unless we see a break above the recent high of $0.7160.
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