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

EUR/USD and GBP/USD have seen recent losses, raising the chances of a wider breakdown. Meanwhile, a wedge breakdown for AUD/USD is also growing more likely, thanks to a fall below trendline support.

EUR/USD weakness points towards potential further breakdown

EUR/USD managed to break lower from its consolidation yesterday, coming off the back of a rally into the 50% retracement and 200-day simple moving average (SMA).

However, given the mixed signals seen in a wider context (higher highs and lower lows), we need to see a break below $1.1432 to provide a more bearish outlook for the pair. Until then, there is a chance we could be retracing. Whether or not the price reacts to the 76.4% retracement at $1.1477 will go some way to telling us whether we are retracing or due to break further to the downside.

GBP/USD falls below key support level

GBP/USD has managed to break below the $1.3098 support level, bringing about expectation of further downside from here. Given the failure to create a new high above $1.3299, there is a distinct possibility that we are going to see a further breakdown.

However, a break below the $1.2922 level would provide a much more reliable sell signal for the medium term. Until that happens, there is still a distinct possibility of a retracement of the rally from $1.2922, as seen in late September. Thus, short-term losses seem likely, yet a break below $1.2922 would be required to negate the notion that this could be a retracement.

AUD/USD wedge breakdown points to further downside

AUD/USD looks to have broken down from its recent rising wedge pattern, with the break below $0.7112 providing a signal of potential impending downside from here.

An impressive fall in unemployment helped the pair rebound overnight, yet this has simply found resistance on the ascending trendline. As such, a bearish outlook is in play unless we see a break above the recent high of $0.7160.

Live #IGForexChat

Put your question to the experts during our live IG Forex Chat.
Streaming on 18 October at 6.30pm (UK time).

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material 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 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. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.

Find articles by analysts