EUR/USD, GBP/USD and AUD/USD risk bearish reversal despite recent volatility
EUR/USD, GBP/USD, and AUD/USD remain at risk of a bearish reversal, as risks raise demand for the dollar.
EUR/USD pauses after yesterday’s sharp ascent
EUR/USD has consolidated overnight, following a sharp move higher yesterday. The bearish reversal picture does come into question with a break through $1.1832, yet we remain back at the 76.4% resistance level for now.
Taken in isolation, this current pause looks like a precursor to further gains. However, that wider bearish trend raises questions of such a move. As such, the reaction to this Fibonacci ($1.1799) and horizontal ($1.1832) resistance zone will be key in determining whether that bearish trend remains in play or not.
GBP/USD stabilises after Fibonacci decline
GBP/USD has stabilised after yesterday's decline which came off the back of a rally into the 76.4% Fibonacci level. With the recent creation of flat-lining lows, there is a question over whether this recent consolidation could be a top.
However, we would need to see a break below the $1.2862 support level to bring about a fresh bearish reversal signal. Until then, the gradual uptrend seen over the past month remains in play.
AUD/USD declines as RBA minutes signal impending easing
AUD/USD has seen further downside after the Reserve Bank of Australia (RBA) minutes released overnight highlighted the prospect of further quantitative easing and interest rate cuts in November. With global growth concerns likely to hit commodity prices, the Australian dollar does look at risk here.
From a technical perspective, this latest decline takes us closer to the crucial $0.7006 support level. A break below that threshold would bring about a three-month low to further solidify the current bearish reversal trend. For the near term, the key is to maintain the trend of lower highs and lower lows. As such, a bearish outlook holds unless we see the price break through the $0.7115 swing high.
The information 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 Bank S.A. 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 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. See full non-independent research disclaimer.
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
- Take your position
- 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.
