EUR/USD, GBP/USD and AUD/USD are all rallying this morning. Could these moves be on borrowed time?
EUR/USD driving higher from fib retracementEUR/USD is turning higher from a deep pullback towards the 76.4% retracement, following a break higher on Friday. This is a continuation of the bullish theme that has been in place for three weeks now.
Given the long upper shadow on Friday, there is a good chance of a reversal from here. However, we have not seen anything to prove this is happening and as such, a bullish view is in play for a move back into $1.1222-$1.1230 resistance.
We would need to see an hourly close below $1.1131 to negate this bullish outlook and bring things back onto the medium/long-term bearish view.
GBP/USD rally unlikely to lastGBP/USD is seeing a countertrend rally this morning, following on from a sharp pullback late on Friday. Should the pair post an hourly close above the $1.2939 mark, this would point towards a deeper retracement, with the $1.3 handle of particular interest (76.4% retracement). Ultimately, another leg lower seems likely and as such, retracements are seen as opportunities to get short once more.
AUD/USD expected to turn lower once moreAUD/USD is pushing higher this morning, following a sharp sell-off at the back end of last week. Crucially, we have seen the pair move lower from a long-term trendline (originating in Q3 2013) and as such there is a good possibility of a wider market reversal coming into play.
With that in mind, the current rally is likely to be on borrowed time, with a rally into either $0.7691 (61.8%) or $0.7704 (76.4%) looking like interesting areas for the pair to turn lower once more. This bearish view is negated with a break and hourly close above $0.7724.
