EUR/USD, GBP/USD and AUD/USD likely to reverse back into trend
EUR/USD, GBP/USD and AUD/USD gains could come under pressure as we await breakout from consolidation or downward trends.
EUR/USD consolidation continues after rebound from key support
EUR/USD declines seen yesterday morning provided an ultimate rebound from the notable $1.119 support level. The pair has been largely consolidating over the past three weeks, failing to find traction in either direction.
Ultimately, we need to see the price break through either $1.1353 (bullish) or $1.1168 (bearish) to bring about a more confident directional bias.
GBP/USD rallies into resistance zone
GBP/USD has managed to surge through Monday's high of $1.2397, to bring a bout a fresh high for the week. While that rally does provide a new higher high, there is a good chance that we are simply retracing the decline from $1.2543, with the price having recovered to the 50% Fibonacci retracement level at $1.2397 thus far.
With the price trading around Fibonacci and trendline resistance, a break through this point would signal a potential rally into the deeper 61.8%-76.4% Fibonacci zone. However, with a clear bearish trend in play, such a move would be viewed as a precursor to further downside unless $1.2543 is broken.
AUD/USD starts to weaken from trendline resistance
AUD/USD has rallied into trendline resistance following a breakout from a week's worth of consolidation. That rally provides us with yet another higher low, yet the wider trend of lower highs also remains in place until we see the $0.6974 level broken.
With that in mind, there is a good chance we will see the pair turn lower once more before long. As such, this tightening consolidation looks likely to hold until we see a break through either $0.6814 or $0.6974.
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