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

Dollar strength across the board sees recent moves unwound, yet how long can this move last?

Pound and dollar
Source: Bloomberg

EUR/USD pullback begins to flat line

EUR/USD has been pulling back from key resistance this week, with the pair in retracement phase following a sharp move higher in late June. Whether this is a deep or shallow retracement is not yet known, but we are seeing tentative signals that the sell-off may already be over.

Despite the continued creation of lower highs and lower lows on an intraday basis, we have seen a failure to break lower once more this morning, with the pair now seeking a new high through $1.1368. However, it would be a break and hourly close above $1.1377 that would hold most value, providing a strong bullish signal. For the short term at least. A break back below $1.1336 would point towards continued downside for the pair.

EUR/USD price chart

GBP/USD continues to decline

GBP/USD is breaking lower once more this morning, perhaps providing a clue that this will also happen across on EUR/USD. This four-hour chart provides a more top level view, highlighting that while the break through $1.2978 last week points towards further gains, we could see a decent pullback first.

With that in mind, further downside is expected for now, but watch for a potential move into the deeper retracements for long positions to come back into play.

GBP/USD price chart

AUD/USD looks set for next leg lower

AUD/USD has been selling off sharply since its move into trendline resistance last week, with a dovish Reserve Bank of Australia (RBA) certainly helping the decline. We have seen a brief period of respite, yet it appears that we could be set for another leg lower from here.

Bear in mind that a break below $0.7535 would be crucial for this bearish short-term picture to become more long-lasting. However, for now it looks like we could see further downside, with the 76.4% retracement and previous support structure around $0.7577 the initial area of support to watch.

AUD/USD price chart

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