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

Recent trends appear to be coming under pressure, with EUR/USD and AUD/USD rallying. However, do these moves signal a trend change or something more short term?

Dollar and pound
Source: Bloomberg

EUR/USD looking to turn higher

EUR/USD has spent this week consolidating around the 61.8% retracement ($1.0651), following a late March retracement. The presumption is that we will see the pair turn higher soon enough, but we have been attempting to predict whether that was going to happen at the 61.8% or 76.4% pullback.

Given the price action we are seeing, it looks like we may be seeing a bottom forming here, with a break through $1.0702 required to provide a bullish signal. 

EUR/USD price chart

GBP/USD consolidating after downturn

GBP/USD has seen significant selling over the past week, following a rally into the 76.4% retracement on Friday. As long as the price remains below $1.2467, it looks like the next move will be lower. Should we see that level breached, we would be looking at a potential retracement into the $1.2510 region.

Ultimately, it is likely that we will see this pair lower soon enough, as it continues the sell-off that has started to come back into place. We would need a break through $1.2559 to negate that view.

GBP/USD price chart

AUD/USD rally unlikely to last

AUD/USD has managed to regain ground, following a sharp downturn at the beginning of the week. However, given the break below $0.7587, this is expected to be a short-term bounce, providing opportunities to look for shorts at a better entry price. So far we have seen that key $0.7587 level respected as new resistance, with the trendline also coming into play. Thus, we could easily move lower from here.

However, as long as we do not break above $0.7615, this rally looks to be a short intraday one. If we did break through $0.7615, we would be looking at a retracement into the $0.7640 region. In either case, a bearish outlook remains, unless we see a break through $0.7679.

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.