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

Federal Open Market Committee minutes send the dollar lower, yet there is reason to believe that this could be fleeting, before pairs reverse in favour of the dollar.

Pound and dollar
Source: Bloomberg

EUR/USD gains after FOMC minutes

EUR/USD managed to regain lost ground yesterday, following a dovish set of FOMC minutes which provided a drag upon the dollar across the board. We are looking for a reversal from these areas, given the fact that the recent rally looks like a retracement of the referendum downturn.

Thus, while yesterday didn’t help the cause we are still looking for signs of a bearish reversal. Currently EUR/USD is facing trendline resistance, which has the potential to push the pair lower. While a bearish view is in play, it makes sense to await a break and hourly close back below $1.1241 to provide confirmation.

GBP/USD in key resistance zone

IN_GBPUSD continues to gain ground, as yesterday’s dovish minutes provided a boost for the pair. However, GBP/USD currently trades within a very interesting resistance zone, with the double-top neckline at $1.3059 seemingly passed, yet the 10 August peak of $1.3094 yet to come.

This is a key hurdle which must be overcome if the current rally is to extend. As such, while we are seeing the pair rising, it makes sense to await a response to the $1.3094 level first given the weakness we’ve seen earlier in the month. 

AUD/USD weakening from Fibonacci resistance

AUD/USD has rallied into the 76.4% resistance once more following a sharp appreciation post-FOMC minutes. Given that this pair has rallied into a major multi-year trendline resistance, we are looking for it to turn lower once more.

As such, as long as we do not break above $0.7749, there is reason to believe we will see the pair turn lower once more today. Support levels of note are $0.7636 and $0.7609.

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