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

Strength is seen in a number of pairs, as the US dollar rally continues to run out of steam.

Euro and US dollar notes
Source: Bloomberg

GBP/USD set to rally off $1.22

Having built a base at $1.22 this week it looks like we could be seeing the beginning of a rally here. A move through $1.23 would open the way to targets at $1.2360 and then $1.2411.

Longer-term, a move could head towards $1.26 and then $1.2723. It would take a move below $1.2175 to suggest further weakness ahead.

EUR/USD remains bullish, despite last night’s drop

After yesterday’s spike higher, we have seen the price edge lower overnight, but the bullish outlook seems intact. A dip towards $1.0480 should bring out fresh buyers, with $1.0583 and then $1.0667 the next areas to watch. It would take a move below $1.0380 to indicate that the surge this week has been negated.

AUD/USD to test $0.7272

Here too there was a sizeable rally, recovering ground lost over the previous five sessions. As a result, we look for a test of $0.7272 in the coming days, with the next area above this to watch being $0.7311, and then $0.7369. A strong area of support has been seen around $0.7150, so a close below here is needed to change expectations here. 

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