EUR/USD, GBP/USD and AUD/USD expected to bring further downside
EUR/USD, GBP/USD and AUD/USD remain within a intraday downtrend, with a near term consolidation likely to resolve in another leg lower.
EUR/USD starts to stabilize, showing potential for near-term rebound
EUR/USD has been on the back foot since rising into a deep retracement that took the price back towards the descending trendline of 2022. Yesterday saw that decline halted, with the daily candle showing some indecision creeping in. While that highlights the potential for a near-term rebound in this pair, it would make sense to await a rise through $0.9774 to start looking out for a short-term rebound back towards trendline resistance.
However, even if we did see such a near-term move, it would likely simply provide another lower high before the price turns lower once again.
As such, the bearish intraday trend remains in play unless the price rises through $0.9774, with such a break providing a potential temporary upside move. Until then, further downside looks likely as the dollar dominates.
GBP/USD with slow start as GDP heads south
GBP/USD has also paused its decline as things stand, with markets weighing up the consequences of a potential extension to Bank of England (BoE) support, and a surprise 0.3% contraction in UK gross domestic product (GDP).
The BoE’s ability to keep the gilt markets orderly in a bid to stave off a crisis in the pension industry will be key here, although comments out of the BoE signal an apparent commitment to end the bond buying scheme on Friday. In any case, we are evidently looking at a downward trending market that will likely resolve with another move lower before long.
While we have seen some upside this morning, it makes sense to wait for the price to surpass the $1.118 level to bring expectations of a short-term upside move here. Until then, another move lower looks likely.
AUD/USD remains on the back foot
AUD/USD continues to underperform, with the pair regularly reaching a new two-year lows.
With that Reserve Bank of Australia (RBA) slowing their tightening policy and China growth concerns growing, we are looking at a potential pair that looks likely to remain geared towards dollar strength.
A rise through the $0.6346 level would bring the potential for a near-term upwards retracement phase. However, until that happens it makes sense to expect more downside for this pair
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