EUR/USD, GBP/USD and AUD/USD looking increasingly likely to turn lower
The dollar looks likely to regain strength, with EUR/USD, GBP/USD, and AUD/USD at risk of a bearish turn here.
EUR/USD continues to trade within consolidation range
EUR/USD has been trading within a consolidation phase, with the price largely remaining in a range between $1.0122 and $1.0273 throughout much of the past three weeks.
The latest push higher has seen us move back towards the upper boundary of that range, with the price showing the potential for another reversal lower given the existence of the descending trendline.
The stochastic is crossing back out of the overbought territory, signalling a bearish shift in momentum. With that in mind, it makes sense to favour bearish positions for a return towards the lower threshold of this range. On the flip side, a break up through the 200-simple moving average (SMA) and $1.0273 would bring about a greater likeliness that we exit this formation for another leg higher.
GBP/USD showing signs of potential weakness after worrying BoE meeting
GBP/USD has been on the back foot over the course of the past 24-hours, with the Bank of England (BoE) stating that they see a recession lasting five quarters and inflation remaining elevated for longer.
The impact on the pound saw the price fall into $1.2063 support, coming off the back of a trendline break. This raises the risk of a downward reversal for the pair, bringing the wider bearish trend back into play.
As such, sentiment looks to be determined by whether we can see that $1.2063 level broken or not. Such a move below that level would likely bring a more protracted period of downside for the pair.
AUD/USD at risk of rolling over after rise into Fibonacci resistance
AUD/USD has enjoyed a welcome move higher over the latter part of the week, with the breakdown seen on Tuesday being forgotten by some.
However, that decline took us through $0.6911, raising the likeliness of a bearish reversal for the pair. With that in mind, this current rise looks like a brief retracement before the bears come back into prominence.
With the 61.8% Fibonacci resistance coming into play at $0.6986, this looks like an opportune moment for the bears to come back into the fold. As such, a bearish view holds here unless the price rises through the $0.7047 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. See full non-independent research disclaimer and quarterly summary.
Start trading forex today
Find opportunity on the world’s most-traded – and most-volatile – financial market.
- Trade spreads from just 0.6 points on EUR/USD
- Analyse with clear, fast charts
- Speculate wherever you are with our intuitive mobile apps
See an FX opportunity?
Try a risk-free trade in your demo account, and see whether you’re onto something.
- Log in to your demo
- Take your position
- See whether your hunch pays off
See an FX opportunity?
Don’t miss your chance – upgrade to a live account to take advantage.
- Get spreads from just 0.6 points on popular pairs
- Analyse and deal seamlessly on fast, intuitive charts
- See and react to breaking news in-platform
See an FX opportunity?
Don’t miss your chance. Log in to take your position.
Live prices on most popular markets
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 spread betting and CFDs.
Stay on top of upcoming market-moving events with our customisable economic calendar.