EUR/USD, GBP/USD and AUD/USD hit by dollar demand
EUR/USD, GBP/USD and AUD/USD pull back as haven flows boost the US dollar.
EUR/USD retraces after Friday gains
EUR/USD has pulled back after a Friday surge, with the break through the descending channel followed up by a rise through $1.0821 to bring about a more bullish short-term view.
Fears over the spread of the coronavirus in Italy could hurt the euro, yet we are currently trading back at trendline support which is holding up for now. A break back below the $1.0778 level would signal a likely continuation of the recent downtrend. However, until that happens there is a chance we see another bout of gains as we rebound from trendline support.
GBP/USD starting to reverse higher after overnight declines
GBP/USD has also seen some selling as we start the new week, with haven flows helping the dollar in early trade. Recent gains have taken this pair towards the 61.8% Fibonacci resistance level of $1.2985, with the price turning lower since.
Watch for a potential rise in the stochastic through the 20-level to bring a more bullish momentum for the pair. However, until that happens, we are likely to see further short-term declines as the dollar finds favour.
AUD/USD falls back into key support
AUD/USD has seen sharp declines in early trading, bringing the pair back into the $0.6586 support level. A break below that level would point towards another bout of selling for this pair.
However, we are seeing tentative signs of potential upside from here and thus the days outlook will be determined by whether we break below $0.6586 or not. Should we see short-term gains, they would be perceived as a retracement of the decline from $0.6639, with a wider bullish outlook only coming in the event that the $0.6639 resistance level is broken.
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