EUR/USD, GBP/USD and AUD/USD head lower as risk-off momentum takes hold
EUR/USD, GBP/USD and AUD/USD hit hard last week, with the dollar looking likely to dominate as key support levels are taken out.
EUR/USD continuing its decline as dollar dominates once again
EUR/USD has been hit hard over the course of the past week, with the price falling back into a fresh one-month low. The recent break back below the $1.0122 signalled the beginning of the next downward phase for the pair, building on the downtrend evident over the course of the year thus far.
With that wider bearish trend in place, it makes sense to expect further weakness from here. As such, a bearish view holds from here, with a rise up through the $1.0203 swing-high required to negate that pessimistic outlook.
We may see an upward retracement at some point, yet the recent shift into lower highs and lows does point towards another downward turn as long as we do not rise through that latest swing-high.
GBP/USD crumbles after double top formation
GBP/USD has similarly been hit hard over the course of the past week, with the price in free-fall as soon as the $1.20 handle was taken out. Crucially, that key round number corresponded with the neckline of a double top formation, with the wider bearish trend coming back into play here.
It is that 2022 downtrend which much be considered as the driver of the price action here, with the loss of support bringing expectations of a drop into and through the prior low of $1.176. For now, the price has been attempting to regain some of the lost ground, but bears remain in charge irrespective of whether we do see the price push higher or not.
Ultimately, we would need to see the price rise through the $1.2142 mark to negate this bearish outlook. Until then, further downside looks likely for this pair.
AUD/USD falls back into key support after rise into Fibonacci resistance
AUD/USD has been on the back foot over the course of the past week, with the pair being sold heavily to take the price back into the $0.6869 swing-low. The theme around a strengthening dollar comes into play once again here, with the pair looking at risk of another period of weakness as stock markets roll over once more.
It is that risk-off demand for the dollar which is likely to be the key driver going forward, with stock-market declines likely to go hand-in-hand with AUD/USD weakness. For this pair, the ability to break back below the $0.6869 level is going to be key here. Such a break would bring about greater confidence that this sell-off will continue apace.
A rise up through the latest intraday swing-high of $0.697 would signal the potential for a more protracted upward retracement. However, we would ultimately need to rise through $0.7137 to negate the bearish view that comes with a break back below $0.6869.
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