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EUR/USD and AUD/USD at key support, while GBP/USD outperforms

EUR/USD and AUD/USD look set for further downside, while GBP/USD breaks higher after recent declines.

EUR/USD continues to drift towards critical support level

EUR/USD remains marginally above the critical $1.1066 support level, following on from a period of declines that have broken both Fibonacci and $1.1085 support.

The long-term outlook remains bearish and we need to see $1.1066 broken to bring that outlook into play for the shorter term. As such, watch for whether we can break that level as a gauge of market sentiment going forward.

GBP/USD breaks resistance amid recent recovery

GBP/USD has managed to follow up its previous bullish break through $1.3097 with a second higher high above $1.3119.

That break came after a deep retracement, yet the inability to break below $1.2954 was telling. Momentum seems to be shifting in the short term, with the stochastic rolling over from overbought. As such, we could see short term weakness, yet that would be perceived as a short-term retracement that can be bought into. Thus, a bullish outlook is in play unless we see a break below the $1.2954 support level.

AUD/USD rebounds after head and shoulders completion

AUD/USD broke below both $0.6849 and $0.6838 support levels yesterday, completing the head and shoulders formation that has been building over the past two months.

This signals further downside to come, although with the price currently rebounding it seems we could be in for a retracement phase first. As such, this rebound looks like a potential shorting opportunity. This bearish outlook holds unless we see a break through the $0.6934 level.

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