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

The euro and sterling are trying to rally for a second day, but moves in the FX markets are likely to be tentative until the new Federal Reserve chairman has made his comments later. 

EUR/USD aims to build on strong support

A tentative recovery is in place here, after EUR/USD's attempt at a rally yesterday was knocked back.

However, the price succeeded in holding above the lows of last week around $1.2260, so if this continues to hold the case for the upside increases. A close above $1.2360 would be an encouraging sign, and would open the way to $1.25 and higher. A drop back below $1.2260 would suggest more losses are likely, with $1.2165 and $1.2092 as potential support.

GBP/USD hopes for more gains

Here too for GBP/USD, an attempt at a rally was defeated yesterday.

However, the push higher from the lows of last week is still intact. The first targets to watch are $1.4070 and then $1.4145, and then on to the January high at $1.4345. A turn lower would head towards $1.3836.

AUD/USD constrained by USD strength

The US dollar appears to be in the ascendant here for AUD/USD, with signs of exhaustion despite the strong bounce at the end of last week.

Gains have been constrained at the $0.7849 level, so this and then the $0.7877 level are the ones to watch. A close above the latter would open the way to $0.80, while support is possible around $0.7807 and then $0.7748.

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