Dollar strength driving EUR/USD, GBP/USD and AUD/USD lower
EUR/USD, GBP/USD and AUD/USD head lower, with key support coming into play as the dollar looks to return to strength.
EUR/USD tumbles back into a key support
EUR/USD ended the week in somewhat dramatic fashion, with the pair tumbling back into the $1.1752 support level to cap off a week of declines.
The ability to break below this level, will be a key in determining where we go from here, with a break lower providing a bearish continuation signal. Alongside a wider bearish pattern in place over the course of June and July, a move below $1.1752 would point towards an extension of this downtrend.
GBP/USD falls back down through 76.4% support
GBP/USD has also taken a hit towards in the end of last week, with the pair falling down below the 76.4%, Fibonacci support level after respecting it all week.
That raises the likeliness of a more notable break back below $1.3843 support, which would end the recent trend of higher lows. As such, while the recent move lower does raise the likeliness of a bearish move coming into play, we need to see $1.3843 support taken out to bring a more reliable bearish signal into play.
AUD/USD falls back into key support
AUD/USD dropped back below trendline support on Friday, with the price falling back into the key $0.7329 support level. The general lack of momentum within this recent recovery does point towards a potential impending breakdown.
With the price finding buyers around this level, there is a good chance we will see a short-term rebound. However, there is a distinct risk that we see the price fall back into and below $0.7329. Should that occur, we would be looking at a continuation of the bearish trend seen over the course of the past two months.
Joshua Mahony | Senior Market Analyst, London
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