FX levels to watch: EUR/USD, GBP/USD and AUD/USD
The dollar remains in the driving seat, with EUR/USD, GBP/USD and AUD/USD all selling off once more.
EUR/USD declines into long-term trendline support
EUR/USD saw sharp losses throughout yesterdays afternoon, with an overly dovish European Central Bank (ECB) meeting sending the pair into a 20-month low. This brings about questions over whether we will respect a long-term inside trendline once more, with another leg lower sparking a potential wider breakdown for the pair.
Much like the move seen in November 2018, we do not necessarily need to respect the trendline perfectly. However, with the price having run past it, we need to see some form of resurgence from here to avoid a wider bearish picture coming into play. As such, watch for what we do from here, with another leg lower signaling a continuation of the bearish trend.
GBP/USD decline likely to be short term
GBP/USD has continued to move lower, with the pair seemingly retracing the $1.2773-$1.3350 rally.
Given that expectation that we are in a retracement phase, a bullish view is expected to return before long. However, for now we remain within a short-term downtrend, and thus further downside seems likely unless we break above $1.3185. Watch for Fibonacci retracements as the next levels of support, and potential buying levels.
AUD/USD continues to break lower
AUD/USD has broken below trendline support this week, with the pair showing signs of another likely period of downside from here.
The key is whether we continue to create lower highs, with a bearish outlook in play unless we rally above the $0.7052 resistance. Until then, any short-term upside looks like a selling opportunity.
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