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

There have been mixed fortunes across the FX spectrum, with EUR/USD losing ground to the dollar, while the pound attempts to push higher once more. Meanwhile, we are looking out for a potential short-term bounce in AUD/USD.

Pound coins and dollar notes
Source: Bloomberg

EUR/USD pulls back to Fibonacci support
EUR/USD has finally started turning lower, following a move above the 76.4% retracement of June’s referendum sell-off. So far this morning, we have seen it fall into the 76.4% pullback of last week’s rally.

While we could see a bounce from here, it seems likely that we are seeing a trend change for the short-term, to revert to the bearish trend of recent years. For further confidence of this move, an hourly close below $1.1241 would be a particularly bearish signal. 

EUR/USD chart

GBP/USD pushing higher once more
Once more it is the 76.4% Fibonacci retracement that is coming into play, with IN_GBPUSD having pulled back to this level ($1.3027) following a rally above the key $1.3094 swing high.

Given this break higher, it seems likely we will see this pair gain ground once more to continue the consolidation of the past two months. Thus, a bullish view is in place for the short-term, with a move back to $1.3186 likely. This view holds unless we see an hourly close below $1.2978.

GBP/USD chart

Awaiting follow through or deep retracement for AUD/USD
AUD/USD saw a strong move lower last week, following the push into a multi-year descending trendline. This points towards the potential for a top in play and as such, further downside seems likely soon enough.

However, last week taught us that this pair is in a somewhat choppy phase, and thus another deep retracement could not only provide us with a nice strong rally, but also another 76.4% pullback to get short once more. 

AUD/USD 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