EUR/USD and AUD/USD drift lower, while GBP/USD consolidates
EUR/USD and AUD/USD continue to lose ground, while political volatility has driven GBP/USD consolidation.
EUR/USD continues to drift lower after head and shoulders breakdown
EUR/USD managed to complete a head and shoulders formation on Tuesday, with the break below $1.181 bringing about a sharp decline for the pair.
We have since seen substantial EUR/USD losses in anticipation of a potential rate cut from the European Central Bank (ECB) today. Given the uncertainty of that event, volatility looks certain. For the near term, a break through the recent swing high of $1.1156 would bring about a signal that we could start to retrace that recent sell-off from $1.1282. Otherwise, a bearish outlook remains in play as the pair continues to create lower intraday highs.
GBP/USD consolidation continues amid uncertain political outlook
The pound has seen a volatile week, with the GBP/USD showing little preference for a bullish or bearish direction.
The current move lower is set within a wider trend of higher lows and lower highs. This is the basic construct of a symmetrical triangle consolidation phase. As such, watch for a break through the first swing high of $1.2558, or swing low of $1.2418, as a gauge of where we go from here.
AUD/USD declines into wider 76.4% retracement level
AUD/USD has continued its declines, with the pair falling below the first swing-low of $0.6996. That points towards a wider retracement coming into play in a similar manner to that seen in early July.
The key question is whether the pair will respect the upcoming 76.4% retracement level at $0.6951. Should that occur then it looks like we are simply retracing before the pair creates another push higher. However, an easy break below $0.6951would raise the likeliness of a breakdown from this recent uptrend, with a break below $0.6910 providing confirmation of such a bearish shift in tone.
This information has been prepared by IG, a trading name of IG Markets Ltd and IG Markets South Africa Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.
Start trading forex today
Trade the largest and most volatile financial market in the world.
- Spreads start at just 0.6 points on EUR/USD
- Analyse market movements with our essential selection of charts
- Speculate from a range of platforms, including on mobile
Live prices on most popular markets
- Forex
- Shares
- Indices
Prices above are subject to our website terms and agreements. Prices are indicative only
