EUR/USD and AUD/USD break support amid GBP/USD outperformance
GBP/USD looks set to outperform, with EUR/USD and AUD/USD expected to decline further.
EUR/USD decline points towards wider reversal
EUR/USD managed to decline below the $1.1066 support level yesterday, with the pair hitting the lowest level since 2 December. However, more importantly, we saw a break from the uptrend in play since the late-November lows.
This points towards a resumption of the long-term downtrend, with further downside likely from here. As such, a bearish outlook is in play unless we see a break through the $1.1118 swing high.
GBP/USD appears to have bottomed out
GBP/USD managed to break through $1.3119 resistance this week, bringing about a bullish reversal signal following recent declines.
With that in mind, we are looking for further upside from here. A decline below $1.2954 would be required to negate this bullish outlook.
AUD/USD expected to decline following head and shoulders
AUD/USD managed to break below the $0.6838-$0.6849 support zone this week, completing a bearish head and shoulders formation.
With that in mind, it looks likely we will see further downside to come. A break below the $0.6827 level would bring about greater confidence that this next leg lower is coming into play. Until then, the current rise could give way to a wider bullish retracement of the $0.6933-$0.6827 decline.
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