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Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 71% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money.

​​​EUR/USD, GBP/USD and AUD/USD head lower, raising the potential for a bearish reversal

EUR/USD, GBP/USD and AUD/USD head lower, with recent central bank meetings serving to bring the dollar bulls back to the table.

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EUR/USD falls back into wedge support

EUR/USD has ended the weak on a less positive note, with the gains seen in the wake of Tuesday’s US inflation reading largely eradicated following central bank appearances from the Federal Reserve (Fed), Bank of England (BoE) and European Central Bank (ECB). The ability to maintain this bullish trend comes down to whether the price can maintain the trend of higher lows that has been in play since late-September.

For now, the pullback has taken us into trendline support, which underpins a rising wedge formation. A decline through that trendline and $1.0443 would signal a potential bearish turn coming into place for the pair. Until then, the bullish trend remains in place.

EUR/USD chart Source: ProRealTime
EUR/USD chart Source: ProRealTime

GBP/USD hit hard after Bank of England meeting

GBP/USD has been hit hard this week, with the pair failing to hold up in the same way that the euro has. While the ECB noted the need to continue pushing rates higher in a bid to combat inflation, the BoE actually saw two Monetary Policy Committee (MPC) members vote to keep rates at 3%. That indecision helped drive the pound lower, with price moving towards the key $1.2106 swing-low.

A break through that level brings an end to the pattern of higher lows that has played out over recent months. As such, the ability or inability to break through that $1.2106 support level will be key in determining sentiment as we head into the tail end of the year.

GBP/USD chart Source: ProRealTime
GBP/USD chart Source: ProRealTime

AUD/USD tumbles from confluence of resistance

AUD/USD has found itself reversing sharply following Tuesday’s foray into fresh three-month highs. Unfortunately, the wider bearish trend appears to be kicking in once again, with the price forming a bearish engulfing pattern after reaching a confluence of resistance. That area saw trendline, 200 simple moving average (SMA), and 76.4% Fibonacci resistance all come together to drive prices lower.

With the wider trend in mind, there is a good chance we have topped out here. A break below the $0.6668 swing-low would be required to negate the recent bullish trend, pointing towards another move lower for the pair.

AUD/USD chart Source: ProRealTime
AUD/USD chart Source: ProRealTime

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