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

EUR/USD and AUD/USD tumble as they look to spark a period of weakness. However, with those losses proving short-lived, the ability to rally from here should provide us with better shorting opportunities. 

Dollars and euros
Source: Bloomberg

EUR/USD tumbles after consolidation

EUR/USD appears to have finally broken lower from its period of recent consolidation, with an hourly close below $1.1182 required to provide us with a bearish signal. This conforms to the overall bearish outlook for the pair.

An hourly close below $1.1182 would provide us with a signal that we are going to see further losses, with $1.1158, $1.1149, $1.1131 and $1.1122 the next support levels of note. We would need to post an hourly close back above $1.1226 to negate this bearish view.

EUR/USD chart

GBP/USD moving into trendline support

IN_GBPUSD is falling into an ascending trendline support, with the pair having created a new lower high yesterday. Given the wider creation of higher lows dating back to the post-referendum low of $1.2796, it is worth being wary of a potential reversal until we push below $1.2866.

As such, while we have a clearly defined downtrend in play, the existence of the ascending trendline (currently at $1.2923), alongside the creation of higher lows on the wider spectrum means that it makes sense to be hesitant regarding further losses for now.

GBP/USD chart

AUD/USD turns lower

AUD/USD has turned lower once more, following a rally into the multi-year inside trendline around $0.7710. While we have seen another sharp move lower this morning, the inability to post an hourly closed candle below $0.7599 means that the losses are likely to be limited for now.

However, the bearish breakdown means we are happy being short and see any rally as an opportunity to get short at a better price. We would need to break through $0.7710 to negate this bearish view.

Whether we could see a rally into the deep Fibonacci retracements remains to be seen, with the $0.7641 level representing an interesting area of resistance.

AUD/USD chart

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