CFDs are a leveraged product and can result in losses that exceed deposits. Trading CFDs may not be suitable for everyone, so please ensure you fully understand the risks and take care to manage your exposure.

FX levels to watch – EUR/USD, GBP/USD, AUD/USD

The dollar has dominated this week, with increased rate hike expectation driving the greenback higher against most currencies.

CFDs are a leveraged product and can result in losses that exceed deposits. Trading CFDs may not be suitable for everyone, so please ensure you fully understand the risks and take care to manage your exposure.
Euro and US dollar notes
Source: Bloomberg

EUR/USD bounces from key support level

Yesterday’s EUR/USD weakness came to an end after the pair hit the February low of $1.0494, with price gaining over the short-term ever since. The upside we have seen this morning has failed to break through $1.0528, which represents a key level in determining whether we could see further short-term gains.

The next move will be dictated by a break below $1.0494, or above $1.0528. A break through $1.0528 would point towards a rally into the $1.0550 region, whereas an hourly close below $1.0494 would look to spark another leg lower for the pair. In either case, a bearish medium-term outlook remains the dominant force.

GBP/USD seeking to spark next leg lower

GBP/USD dropped into the $1.2253 support level (mid-January low), with price subsequently consolidating above that level. With price attempting to break below that support zone, a clear hourly close below here would provide a bearish continuation signal for the pair.

The next levels to watch out for are the 70% ($1.2204) and 76.4% ($1.2158) Fibonacci retracements. Alternately, an hourly close above $1.2308 would provide a warning sign that we could be due a bounce for the pair. 

AUD/USD breaks into downtrend

AUD/USD has reversed in style, with the break below $0.7649 providing us with a great sell signal. After yesterday’s sharp sell-off, it is simply a case of selling the retracements in the expectation of further downside.

An hourly close below $0.7543 would point towards the next leg lower coming into play. Alternately, an hourly close above $0.7577 would look like sparking a retracement of yesterday’s losses. In either case, further losses seem likely in the medium-term.

This information has been prepared by IG, a trading name of IG 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. 

CFDs are a leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your initial deposit, so please ensure that you fully understand the risks involved.