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

The dollar has been gaining throughout the week, with the price action pointing towards the potential for further downside. However, there are some signs that we could see rebounds for the likes of EUR/USD and AUD/USD.

Euro notes
Source: Bloomberg

EUR/USD attempting to break through key support

EUR/USD is trying to break below the crucial $1.0635 support level this morning. An hourly close below here would likely spark another leg lower for the pair.

This current downturn is perceived as a retracement of the rally from $1.0494. As such, longs would look attractive from $1.0591. With that in mind, while we could see further downside, it would likely be fleeting, with the wider uptrend expected to kick in once more soon.

GBP/USD consolidation likely to lead us lower

GBP/USD is consolidating off the back of a break out of its uptrend last week. The subsequent rally into the 76.4% retracement has been sold into, yet we are hesitating in that next descent.

The expectation is that we will see another leg lower, with an hourly close below $1.2424 likely sparking that next move. As such, a bearish view remains in place unless we see an hourly close above $1.2561.

AUD/USD wedge points towards potential bounce

AUD/USD has been selling off in a predictable manner lately, providing us with some nice gains. However, it is worth noting that the price is now approaching the absolutely crucial $0.7491 support level, below which a major double top formation would be completed.

The fact that each leg lower is now becoming smaller and smaller means that we are seeing a falling wedge here, which points towards a potential rally for the pair. An hourly close above $0.7568 would be the signal that we are about to see a move higher. Until then the downtrend remains intact, but it is becoming increasingly likely to turn.

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