EUR/USD, GBP/USD, and AUD/USD likely to turn lower despite brief gains

EUR/USD, GBP/USD, and AUD/USD regain ground amid brief dollar weakness, yet the bears could swiftly return.

EUR/USD at risk of a bearish turn despite recent gains

EUR/USD has been on the rise since yesterdays lows, with the pair rallying back into another 76.4% Fibonacci resistance level. Looking back at the price action seen in early December, there is a risk we could be paving the way for a major head and shoulders formation.

A break below the $1.2053 level would be required to bring that into fruition. Looking at near-term price action, the recent rally appears to have been another retracement, with price rolling over from Fibonacci resistance.

With that in mind, the latest retracement looks to have provided us with another selling opportunity. A break up through the $1.2189 level would be required to start eroding that ongoing bearish story.

GBP/USD rebounds from 61.8% retracement

GBP/USD managed to surge higher from the 61.8% Fibonacci support level yesterday, with the wider pullback coming into play after dropping below the near-term $1.3636 support level.

The rise through $1.3746 resistance brings about a fresh bullish continuation signal. As such, further upside looks likely before long, with any short-term downside looking like a potential retracement rather than a wider reversal. With that in mind, a bullish view holds unless price drops below $1.3609.

AUD/USD turning lower from confluence of resistance

AUD/USD is on the back foot once more this morning, with the latest rally taking us into a confluence of trendline and 76.4% Fibonacci resistance.

The recent trend of lower highs does point towards a potential bearish phase coming into play to continue that pattern. With that in mind, a bearish outlook holds unless price rises through the $0.7782 swing high.

IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

The information/research herein is prepared by IG Asia Pte Ltd (IGA) and its foreign affiliated companies (collectively known as the IG Group) and is intended for general circulation only. It does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit.

Please see important Research Disclaimer.

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
liveprices.javascriptrequired
liveprices.javascriptrequired

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.

liveprices.javascriptrequired

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 20 mins.

The Momentum Report

Get the week’s momentum report sent directly to your inbox every Monday for FREE. The Week Ahead gives you a full calendar of upcoming key events to monitor in the coming week, as well as commentary and insight from our expert analysts on the major indices to watch.

For more info on how we might use your data, see our privacy notice and access policy and privacy webpage.

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.