EUR/USD, GBP/USD and AUD/USD looking increasingly likely to turn lower
The dollar looks likely to regain strength, with EUR/USD, GBP/USD, and AUD/USD at risk of a bearish turn here.
EUR/USD continues to trade within consolidation range
EUR/USD has been trading within a consolidation phase, with the price largely remaining in a range between $1.0122 and $1.0273 throughout much of the past three weeks.
The latest push higher has seen us move back towards the upper boundary of that range, with the price showing the potential for another reversal lower given the existence of the descending trendline.
The stochastic is crossing back out of the overbought territory, signalling a bearish shift in momentum. With that in mind, it makes sense to favour bearish positions for a return towards the lower threshold of this range. On the flip side, a break up through the 200-simple moving average (SMA) and $1.0273 would bring about a greater likeliness that we exit this formation for another leg higher.
GBP/USD showing signs of potential weakness after worrying BoE meeting
GBP/USD has been on the back foot over the course of the past 24-hours, with the Bank of England (BoE) stating that they see a recession lasting five quarters and inflation remaining elevated for longer.
The impact on the pound saw the price fall into $1.2063 support, coming off the back of a trendline break. This raises the risk of a downward reversal for the pair, bringing the wider bearish trend back into play.
As such, sentiment looks to be determined by whether we can see that $1.2063 level broken or not. Such a move below that level would likely bring a more protracted period of downside for the pair.
AUD/USD at risk of rolling over after rise into Fibonacci resistance
AUD/USD has enjoyed a welcome move higher over the latter part of the week, with the breakdown seen on Tuesday being forgotten by some.
However, that decline took us through $0.6911, raising the likeliness of a bearish reversal for the pair. With that in mind, this current rise looks like a brief retracement before the bears come back into prominence.
With the 61.8% Fibonacci resistance coming into play at $0.6986, this looks like an opportune moment for the bears to come back into the fold. As such, a bearish view holds here unless the price rises through the $0.7047 level.
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