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

The return of US markets should see a revival in FX volatility, as both the pound and the euro look vulnerable to further declines.

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EUR/USD bulls drop the ball

Further weakness is being seen this morning for EUR/USD, as the price drops back below $1.24 and heads towards support at $1.2323.

Intraday bounces have been sold so far this week, and we will see if this intensifies with the return of US traders. Below $1.2323, the price will head towards $1.2165, and then to the $1.2092 level.

GBP/USD at risk of further falls

It looks like bullish momentum has petered out here too for GBP/USD, with the drop below $1.40 raising the prospect of a move back towards $1.38, where the price recovered earlier in the month.

Below this, the 50-day simple moving average (SMA) of $1.3753, and then $1.3659, come into play. A recovery above $1.4050 would break the short-term pullback, but the $1.4150 area remains as potential resistance.

AUD/USD drifts sideways

AUD/USD's recovery from the lows of last week is intact, but it has stalled. So far this week the pair has moved sideways, faltering around $0.7940 and then bouncing from just below $0.79.

A break higher would target $0.80, and then on to $0.8076 and $0.8136. Further declines would likely find support at $0.7850 and $0.78, before heading down to $0.7750.

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.

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