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

Resurgent USD strength has knocked back a rising pound, while the euro and Aussie are on the back foot.

Euro and US dollar notes
Source: Bloomberg

Look to buy GBP/USD dips

A steady push higher in recent days is undergoing another modest retracement thanks to USD strength, but overall the attitude here should be to buy the dips. The ongoing target on the upside should still be the early August peak at $1.3350.

It would take a move below $1.3050 to reverse the current bullish outlook, which would then be headed to the mid-August low at $1.29. 

EUR/USD seems to favour selling the rallies

A sharp drop yesterday took the pair down to support at $1.1250, but with the daily stochastic now turning lower it would seem selling the rallies has become the approach to take.

A move to $1.12 would create a new lower low, and then beyond this the target would become $1.1133. A new upward move would need to clear $1.1350 to indicate a fresh rally is on the cards.

AUD/USD in the hands of the sellers

It has been a shallow downtrend in the AUD/USD pair since 10 August, but it has offered plenty of opportunities to sell into strength.

The failure to build on the overnight bounce and head back towards Tuesday’s peak at $0.7650 indicates the sellers are still in charge. A fresh low would require a drop through Monday’s low around $0.7585, clearing the way to $0.75. 

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