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

Dollar strength is back in play, with EUR/USD, GBP/USD and AUD/USD all looking to continue their downtrends.

British pound
Source: Bloomberg

EUR/USD consolidates within downtrend

EUR/USD has been consolidating this week, following a strong downturn in the final week of March. The price is currently back at the 61.8% Fibonacci support level, which has been holding so far.

Given the downtrend seen of late, this looks like a short term pause rather than a bottom, with a move down to 76.4% ($1.0591) a distinct possibility. As such, while the price remains below $1.0702, a bearish outlook remains favoured, with an hourly close below $1.0651 pointing towards the resumption of the trend.  

GBP/USD sell-off continues apace

GBP/USD is continuing its descent following a rally into the 76.4% retracement on Friday. The market reversal we have been looking for seems to be working out perfectly, with the price now having broken below trendline and horizontal support ($1.2433).

From here it is likely we will continue to move lower, with the pair expected to move back into the $1.2376 support before long. A bearish outlook remains valid unless we break through the $1.2496 swing high set overnight.

AUD/USD breaks below critical support level

AUD/USD has sold off once more, with the price falling below the key $0.7587 support level this morning. This takes us to the next part of the story, with the price having switched into a bearish trend following the March reversal at $0.7750 resistance.

We are now searching for a move back down to $0.7491, which if broken would complete a sizeable double top formation. For now, we are looking for another leg lower, with rallies sold into. As long as the price does not break through $0.7625, the bearish outlook remains in play. 

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