EUR/USD, GBP/USD and AUD/USD are all expected to gain, as the dollar takes a break following Friday’s sharp appreciation. However, how long will this dollar weakness move last?
EUR/USD retracing from Friday’s sell-offWe are seeing EUR/USD rally after a sharp deterioration on Friday. The likeliness is that we will see the bearish medium-term view come back into play soon enough, yet there is still a strong chance of further gains meanwhile.
Thus, an hourly close above $1.1198 would point towards a push into the $1.1217 region. Given the size of Friday’s downturn, it is unlikely we will retrace enough to get to the 76.4% retracement at $1.1253. As such, we are looking for weakness to come in around the 50% or 61.8% Fibonacci level.
GBP/USD likely to push higher in the short-termGBP/USD is also in a retracement phase, which points towards short-term gains and a break back through $1.3091 resistance. The medium-term bearish view will come back into play soon enough, yet for the time being, it seems likely we will see further gains to retrace some of Friday's sell-off.
With that in mind, watch out for Fibonacci resistance as areas of potential reversal. Conversely, an hourly close back below $1.3021 would provide us with a renewed bearish view.
AUD/USD to push higher after reversal
AUD/USD is clearly in a recovery phase and after yesterday’s retracement, it seems like we are going to push higher this morning.
Yesterday saw the pair pull back from the $0.7568 resistance area and as such, both $0.7568 and $0.7573 are going to be the key hurdles to overcome for the short-term.
Until that resistance zone is overcome, any further pullback would be deemed a retracement of yesterday’s early gains, where the bullish view holds unless we see an hourly close below $0.7475.
