EUR/USD, GBP/USD and AUD/USD rebound brings potential reversal opportunity
EUR/USD, GBP/USD and AUD/USD rebound into resistance, but wider bearish patterns signal the potential for another downside move.
EUR/USD rally takes the price back into key trendline resistance
EUR/USD has managed to claw back enough ground to take the price into a long-term descending trendline. While the price is yet to engage with the trendline, it is worthwhile noting the potential for a similar fate to previous occasions that the pair has approached this line.
Dollar pressure has certainly eased of late, with traders pondering what might happen when the Federal Reserve (Fed) stop raising rates. However, for now it seems highly unlikely that the Fed will look to cut interest rates anytime soon, with that extended period of elevated rates likely to drive further economic weakness and dollar strength.
With that in mind, this rebound does look similar to the previous occasions, with the pair expected to turn lower once again here. A rise through parity ($1.00) would be required to provide an initial signal that we could be on our way to a more bullish phase. Until then, bearish positions are favoured.
GBP/USD rallies into trendline resistance
GBP/USD has also managed to regain ground, with the UK political system looking to gain stability after Boris Johnson pulled out of the leadership race. With Sunak looking nailed on as the new prime minister (PM), sterling is likely to be encouraged that we essentially have two chancellors at the helm.
Nonetheless, dollar strength is the wider story that will likely dominate this pair, with the recent rebound in GBP/USD reflecting the rebound in stocks. As such, another risk-off move in markets would bring a bearish reversal for this pair. With trendline resistance in play here, there is a good chance we do see a move lower before long.
A rise up through $1.1495 and $1.1738 would be required to bring about a more positive view for the pair.
AUD/USD turning lower from Fibonacci resistance
AUD/USD has found itself on the back foot as we start the week, with the wider bearish trend looking to kick in once again.
Overnight data out of China did little to help the Australian dollar, with imports and exports both disappointing. While the price finally managed to break up through the previous low of $0.6363 last week, this simply took us into the 61.8% Fibonacci resistance level at $0.6403.
As such, another move lower looks likely from here, with a break up through the $0.6547 swing high required to bring about a more positive outlook.
This information has been prepared by IG, a trading name of IG Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
CFDs are a leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your initial deposit, so please ensure that you fully understand the risks involved.
Start trading forex today
Find opportunity on the world’s most-traded – and most-volatile – financial market
- Trade spreads from just 0.6 points on EUR/USD
- Analyse with clear, fast charts
- Speculate wherever you are with our intuitive mobile apps
See an FX opportunity?
Try a risk-free trade in your demo account, and see whether you’re onto something.
- Log in to your demo
- Try a risk-free trade
- See whether your hunch pays off
See an FX opportunity?
Don’t miss your chance – upgrade to a live account to take advantage.
- Get spreads from just 0.6 points on popular pairs
- Analyse and deal seamlessly on fast, intuitive charts
- See and react to breaking news in-platform
See an FX opportunity?
Don’t miss your chance. Log in to take your position.
Live prices on most popular markets
- Forex
- Shares
- Indices
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.
