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

The potential for a reversal in the dollar brings possible upside for EUR/USD, GBP/USD and AUD/USD. However, with key hurdles to overcome, confirmation is yet to occur.

Source: Bloomberg

EUR/USD begins to show signs of strength

EUR/USD has started to turn higher, following a brief foray below the crucial $1.1730 support level. This move below the wider support level means that the pair continues to create lower highs and lows on the longer-term timeframes. As such, we could have a period of upside and still remain within a wider downtrend.

With that in mind, it is notable that the price has broken up above the first swing high of $1.1763, thus negating the recent intraday pattern of lower highs and lows. A bullish view is now in place for a retracement of the wider $1.1868-1.1725 move. A break below $1.1725 would negate this outlook.

GBP/USD pulls back from key resistance

GBP/USD has turned lower from the crucial $1.3228 resistance level, with the price moving below the 61.8% retracement so far. This key resistance level is going to be an important hurdle that needs to be overcome to provide greater confidence of a bullish reversal on a wider perspective.

As such, the breakout below $1.3158 or above $1.3228 will be key in determining where we go from here. Should the price move into the 76.4% retracement at $1.3174, then this would look like a strong buying opportunity, based on the potential for a beak back up into $1.3228.

AUD/USD breaking lower once again

AUD/USD is experiencing another sharp sell-off this morning, with the price moving into the 76.4% retracement after extending lower following a double top formation. The pair showed signs of a resurgence earlier in the month, with the break up through the $0.7875 swing high following a rebound from the crucial $0.7732 support level.

There is still a good chance of another push higher soon enough, with a break below $0.7732 required to negate such a view. So, watch out for the 76.4% retracement ($0.7772) as a possible bullish reversal area for the pair. 

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.

Find articles by analysts