EUR/USD, GBP/USD and AUD/USD head lower, but will recent bullish trend return?
The dollar comes back into favour as risk-off sentiment drives EUR/USD, GBP/USD and AUD/USD lower.
EUR/USD seeks to stabilize after trendline decline
EUR/USD has been hit hard over the course of the past 24-hours, with fears around Nancy Pelosi’s visit to Taiwan bringing some haven demand back into play for the dollar. The recent gains for EUR/USD had brought the price back into trendline resistance, which roughly correlates with the location of the 200-simple moving average (SMA) indicator.
With that in mind, there is a good chance we see the price roll over in the direction of the wider trend here. With the stochastic reversing upwards from oversold, there is still a chance we rebound here though.
As such, it makes sense to watch for a break below the $1.0096 level before looking for bearish positions. Until then, there is still a chance we see the bulls come back into play to push the price towards trendline resistance once more.
GBP/USD falls back into trendline support
GBP/USD has drifted lower over the start of this week, despite the intraday uptrend playing out over the course of the past three-weeks.
The recent turnaround from the 76.4% resistance region highlights how we also have a wider bearish trend worth considering, with a push up through $1.2406 required to negate that negative pattern. Until that takes place, it makes sense to look out for a continuation of this bullish trend unless we are shown otherwise.
With that in mind, this trendline is expected to bring another bullish phase here, with a decline through $1.2063 required to bring about a fresh bearish outlook.
AUD/USD breaks down through key support level
AUD/USD has been hit hard this week, with the Reserve Bank of Australia (RBA) rate decision doing little to bolster the Australian dollar.
Crucially, we have seen the price decline through key $0.6911 support overnight, bringing an end to the intraday pattern of higher lows. That raises the likeliness that we are due a bearish phase from here, with a renewed push up through the $0.7046 swing high required to bring the recent bullish pattern back into play.
Until such a break occurs, any short-term upside would look like a precursor to the pair turning lower in the direction of the wider trend.
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