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EUR/USD and GBP/USD fade, while AUD/USD continues to gain ground

EUR/USD, GBP/USD and AUD/USD have been gaining ground. However, is this the beginning of a wider bullish phase or just a short-term blip?

EUR/USD retraces back into notable support level

The EUR/USD rebound has faltered after a deep retracement into the 61.8-76.4% Fibonacci zone. That points towards a potential bearish reversal coming back into play before long. With the price drifting lower since Thursday’s peak, we have seen a decline back into the $1.1018 swing low. With the price respecting that level, we could see a short-term rebound from here.

However, it looks likely that it will turn lower in the near term, with markets expected to turn their gaze to Thursday’s European Central Bank (ECB) meeting before long. A break through the $1.1154 peak would bring a more bullish picture, but a bearish outlook will remain in play until that happens.

GBP/USD starts to reverse recent gains

GBP/USD managed to gain a significant amount of ground last week, with optimism that a no deal can be delayed or averted driving the pair higher.

However, we are starting the week in a very different fashion as the price reverts lower. Given the amount of ground gained throughout last week, there is plenty of downside room to move into even if we are retracing. The break through $1.2310 points towards a high likeliness that this is a retracement. Therefore, a break below $1.2210 would bring greater confidence of a deeper fallback, with a retracement around $1.2100 a distinct possibility.

AUD/USD continues to gain ground

AUD/USD managed to break through an important zone of resistance last week, paving the way for further upside. That cluster of previous support, around $0.6822-$0.6831, was a key resistance area that stood in the way of a wider bullish phase coming into play.

With this in mind, look out for further upside from here, with a break back below $0.6807 required to negate this bullish short-term view.

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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