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​​EUR/USD and AUD/USD break support amid GBP/USD outperformance

GBP/USD looks set to outperform, with EUR/USD and AUD/USD expected to decline further.

EUR/USD decline points towards wider reversal

EUR/USD managed to decline below the $1.1066 support level yesterday, with the pair hitting the lowest level since 2 December. However, more importantly, we saw a break from the uptrend in play since the late-November lows.

This points towards a resumption of the long-term downtrend, with further downside likely from here. As such, a bearish outlook is in play unless we see a break through the $1.1118 swing high.

GBP/USD appears to have bottomed out

GBP/USD managed to break through $1.3119 resistance this week, bringing about a bullish reversal signal following recent declines.

With that in mind, we are looking for further upside from here. A decline below $1.2954 would be required to negate this bullish outlook.

AUD/USD expected to decline following head and shoulders

AUD/USD managed to break below the $0.6838-$0.6849 support zone this week, completing a bearish head and shoulders formation.

With that in mind, it looks likely we will see further downside to come. A break below the $0.6827 level would bring about greater confidence that this next leg lower is coming into play. Until then, the current rise could give way to a wider bullish retracement of the $0.6933-$0.6827 decline.

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. See full non-independent research disclaimer and quarterly summary.

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