EUR/USD, GBP/USD and NZD/USD rebound could be short-lived
EUR/USD, GBP/USD and NZD/USD look at risk of bearish reversal, with the pound leading the way lower.
EUR/USD regains ground within recent consolidation phase
EUR/USD has been on the rise since Thursday's low, with the pair looking to be continuing the consolidation that has dominated the past two weeks.
With the price halfway into this recent range, there is a good chance we continue to move higher from here. As such, a bullish outlook is in play today, with a drop back below $1.0804 required to negate this short-term bullish view.
GBP/USD collapses through key support
Recent losses have taken GBP/USD into the lowest level in almost two months, with the pair attempting to regain ground in recent hours. Despite the possibility of short-term upside from here, we are looking set for further downside given the breakdown below $1.2166 shown on the four-hour chart.
That break highlights the completion of a topping pattern, with further losses looking highly likely. With that in mind, a bearish outlook remains in play unless we see a break back through the $1.2238 swing high. Until we break that level, any short-term upside would be viewed as a selling opportunity rather than the basis for a long-lasting rebound.
NZD/USD rebounds from critical support level
NZD/USD losses have taken the pair back into a critical area of support, with the pair attempting to rebound from that $0.5921 level this morning. Whether this will be the beginning of a protracted period of gains remains to be seen.
However, a break below the $0.591 level would signal a likely top for this market, building on the bearish decline through $0.5995. To the upside, we would need to see the $0.6016 level broken to bring about a more bullish view and an end to the short-term downside of the past week. Until that level is broken, there is a good chance we are seeing the top for NZD/USD. However, it makes sense to either await a break through $0.6016 or $0.591 to confirm the direction from here.
Alternatively, bearish positions could look attractive if we see a deep retracement into the $0.598-$0.5994 zone (61.8%-76.4%).
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