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

BoE day has arrived, with the potential for significant volatility in sterling crosses. In addition, some of this may spill over to euro pairs depending on the actions taken by Mark Carney and his team.

Sterling and US dollar currencies
Source: Bloomberg

GBP/USD caught in a bearish trend

July’s tale has been replicated in August, namely that $1.34 continues to be too much of a barrier for upside progress here. The pair remains stuck in a bearish trend, with little sign that a real upward move is on the cards – today’s Bank of England meeting has certainly stayed the hand of sterling bulls, with the ongoing tide of negative data not helping matters.

A significant dovish shift on the MPC today might see the pair head down towards $1.32, and then on to possible support around $1.3050. 

GBP/USD price chart

EUR/USD weakness looks to bring out the buyers

The pair has yet to regain the heights seen earlier in the year at $1.15, and yesterday’s sharp reversal suggests a period of USD strength may be in the offing. As a result we could see a move back to the 200-day simple moving average ($1.1078), and then perhaps down to the late-July low around $1.0950.

Nevertheless, buying the dips has been the approach to take here since February, with sustained weakness likely to bring out fresh buyers. 

EUR/USD price chart

AUD/USD gains stall

AUD/USD gains have stalled since late June around $0.76, with the past few days repeating that pattern. Nonetheless, for now the uptrend goes on, so weakness back in the direction of $0.74 could see fresh buyers emerge.

There is a clear amount of resistance from $0.76 to $0.77, with a break above the latter potentially heading towards the mid-April highs at $0.7850. 

AUD/USD price chart

The information 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 Bank S.A. 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 and as such is considered to be a marketing communication.

Find articles by analysts