EUR/USD and GBP/USD likely to fall back

EUR/USD and GBP/USD look primed for another leg lower over the short term.

EUR/USD starts to weaken after recent rally

EUR/USD has seen sharp gains throughout the past week, with the pair hitting a four-month high on Tuesday. We have seen a tentative signal that this rally could reverse in the short-term, however, bringing about another downward retracement.

The recent creation of lower highs and lows seen since that $1.1239 peak signals a potential bearish phase coming into play. A drop below $1.1181 would provide a more confident signal of such a move. For now, watch whether we see a break through the $1.1224 swing-high or not. Should that break occur, we would look likely to come back into a more bullish outlook. Until then, another leg lower looks likely today.

GBP/USD at risk of another leg lower

GBP/USD has similarly been gaining ground over the past week, yet the decline seen overnight signals a potential downward retracement coming into play.

With the current price action providing a very minimal rebound, this looks likely to resolve in another leg lower. As such, a deeper retracement looks likely from here, with a bearish picture in play for today unless we see a rise through the $1.3268 level.

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

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.