Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. Before deciding to trade foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. You could sustain a loss of some or all of your initial investment and should not invest money that you cannot afford to lose. Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. Before deciding to trade foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. You could sustain a loss of some or all of your initial investment and should not invest money that you cannot afford to lose.

EUR/USD, GBP/USD and AUD/USD weaken, with risk of further downside to come

EUR/USD, GBP/USD and AUD/USD head lower as the dollar strengthens, with risk of further downside to come.

EUR/USD continues to trend lower

EUR/USD slipped into a fresh 16-month low on Friday, following on from the retracement phase seen earlier in the week. With a clear downtrend in play here, there was always a strong chance we could see the bears come back into play before long.

With the price having now broken through support, the bullish crossover seen on the stochastic does point towards some potential short-term respite from this selloff. As such, there is a risk of an upward turn before long, but any such move higher would be deemed a selling opportunity unless the price breaks up through the latest swing-high of $1.1374.

GBP/USD turning lower from Fibonacci resistance

GBP/USD has been on the back foot following a rally into the 61.8% Fibonacci resistance level at $1.351.

With the price turning lower since, a break below the $1.3396 level would bring a bearish continuation signal. Until then, there is also a chance we see the price turn upwards to continue the intraday recovery that has been playing out over the course of the past week.

AUD/USD continues to trend lower despite wider bullish trend

AUD/USD has continued to trend lower over the course of the past three weeks, with the price appearing to trade within a falling wedge formation.

The wider trend of higher lows does signal the potential for a bullish resurgence, but the recent selloff does raise the risk of a bearish break below the $0.717 support level. As such, there are stories on both sides of the coin here, with a chance we see the bulls come back into play until $0.717 is broken. A move up through the likes of $0.7291 and $0.737 would be needed to build a stronger case for such a bullish resurgence.

This information has been prepared by IG, a trading name of IG US LLC. This material does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. You should not treat any opinion expressed in this material as a specific inducement to make any investment or follow any strategy, but only as an expression of opinion. This material does not consider your investment objectives, financial situation or needs and is not intended as recommendations appropriate for you. No representation or warranty is given as to the accuracy or completeness of the above information. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. Any research provided should be considered as promotional and was prepared in accordance with CFTC 1.71 and designed to promote the independence of investment research. See our Summary Conflicts Policy, available on our website.

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