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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.

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