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

The dollar remains under pressure, with EUR/USD, GBP/USD, and AUD/USD all gaining ground over the past week. With consolidation currently in play, further upside looks likely. 

EUR/USD gradually regaining ground

EUR/USD is on the upward journey within a range that has been in place throughout much of 2018. The recent retracement has been relatively moderate, with the price hitting the 50% level thus far.

Given the shallow nature of this current rebound, there is a strong chance we will see a three-legged retracement, with the price moving into the 61.8% or 76.4% level. As such, while we are expecting to see a move back towards the upper echelons of the range, we could quite easily see a short-term period of weakness beforehand.

GBP/USD consolidates after key break

GBP/USD managed to break through the crucial $1.4244 swing high last week, in turn bringing about a two-month high for the pair.

The next major resistance level to look out for comes at the late-January peak of $1.4346. Until then, we are expecting to see further upside, unless the price manages to break below the most recent swing low (currently $1.4220).

AUD/USD turning higher following pullback

AUD/USD has been recovering ground over the past week, with a falling wedge moving into a crucial 76.4% retracement at $0.7651.

Much of the weakness seen on Friday and in early trade today has been negative, with the price falling close to the $0.7738 swing low. A break below there would point towards a more bearish phase coming into play. However, with the price now starting to recover, it is clear that we could see this rebound continue apace for the time being. 

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.