EUR/USD, GBP/USD, and AUD/USD rebound could prove short-lived

EUR/USD, GBP/USD, and AUD/USD seeing marginal gains, yet the wider bearish picture could come back into play before long.

EUR/USD declines further amid dovish ECB rhetoric

EUR/USD has continued its decline, with a dovish message from the President of the European Central Bank (ECB) Mario Draghi helping drive the euro lower yesterday.

This took us into the deep retracement zone between the 61.8% and 76.4% Fibonacci levels. Given the prior wedge breakout, this looks like a retracement before we turn higher. However, much of that will come down to whether the US Federal Reserve (Fed) decide to cut rates later today. In any case, a bullish signal comes with a break through the $1.1247 level. Until then, another leg lower remains a distinct possibility.

GBP/USD turns higher after break below key support

GBP/USD is starting to gain ground after yet another phase of weakness for the pair.

This recent break below $1.2559 and trendline support signals a likely wider bearish phase coming into play. However, for now we could see the pair start to gain ground, with a rise through $1.2605 providing us with a more bullish outlook for the short term. That being said, such a move would only look like a retracement of the decline from $1.2763. Thus, a bearish medium-term outlook remains as long as we are below that $1.2763 level.

AUD/USD gains ground, yet bearish outlook remains

AUD/USD saw a rare rebound yesterday, with the pair rising back above the crucial $0.6864 breakdown level.

The initial fall below that level signals a return to the wider bearish outlook for the pair, with further downside looking likely before long. A rise through $0.6884 would signal a potential bullish short-term picture coming into play. However, whether that happens or not, a bearish outlook remains unless we see a break above $0.7021.

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

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


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.