EUR/USD, GBP/USD and AUD/USD expected to remain on the back foot
EUR/USD, GBP/USD and AUD/USD likely to maintain their bearish trend, as the dollar remains the currency of choice.
EUR/USD falls into fresh 19-year low
EUR/USD has been on the slide once again, with the price falling through Monday’s low of $0.9878 to tentatively create a fresh 19-year low. Falling natural gas prices should help sentiment in Europe as traders weigh up the impact of soaring energy prices on growth. Meanwhile, tomorrow brings the latest European Central Bank (ECB) meeting, with markets largely expecting a historic 75-basis point (bp) hike from Lagarde and co.
Nevertheless, the downtrend remains intact, with economic struggles and market weakness bringing dominance for the dollar. That is expected to continue unless the price rises through the $0.9986 swing high. With that in mind, any short-term upside looks like a fresh selling opportunity until we break from this ongoing intraday trend of lower highs.
GBP/USD heads back into support
GBP/USD has been attempting to push higher off the back of yesterday’s announcement that the new Prime Minister (PM) Liz Truss will cap energy prices in a bid to bring inflation under control. However, once again we have seen the dollar come back into prominence, driving the price down into the $1.1444 low established on Monday. What is worth noting here is that the price lies just marginally above the crucial $1.1411 support level, which represents the March 2020 low.
Beyond that level we are looking at a 37-year low. With the price having passed through the $1.159 swing high and this major support level below, it makes sense to exercise caution here. Thus, while the pair does look likely to break lower soon enough, it makes sense to await a decline through $1.1411 before taking on fresh positions.
AUD/USD head and shoulders breakdown comes after RBA hike
AUD/USD has been hit hard since breaking through the head and shoulders neckline around a week ago. The wider bearish trend, coupled with that intraday bearish pattern signals the potential for a continued decline despite the potential for a short-term move higher at some point. While the price has been on the slide since completing that pattern, it is notable that we have still been creating lower highs throughout that period.
With that in mind, any near-term upside looks like a potential selling opportunity unless the price breaks through the $0.6832 swing high. To the downside, keep an eye out for the $0.6681 support level.
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