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

EUR/USD, GBP/USD and AUD/USD all look set for further gains with the dollar weakening despite expectations of a rate hike today.

GBP/USD figures
Source: Bloomberg

EUR/USD looks set for another push higher

EUR/USD has retraced into the 61.8% Fibonacci level overnight, following a rally into yet another high at the beginning of the month. We are starting to see some tentative signs of strength come back into play, with the creation of an intraday higher low.

There is still the potential for another short-term fall, yet this would be perceived as a buying opportunity, unless the price breaks below $1.1109.

GBP/USD breaks through key resistance

GBP/USD has confounded the 'naysayers' with the pair pushing through the notable $1.2770 level overnight. Considering that this was preceded by cable failing to break below $1.2635, the push into a new high is a bullish signal. For now, we are looking likely to retrace from the 50% level, at which point we could potentially be looking at a retracement of the rally from $1.2739.

Ultimately, it looks as if we are set for a period of strength for the pair, with the wider 61.8% ($1.2836) and 76.4% ($1.2884) looking interesting as potential targets. A break back below $1.2738 would quell this bullish sentiment somewhat.

AUD/USD resurgence looks back on track?

AUD/USD has managed to rally sharply following a deep retracement that broke below the key $0.7526 support level. This means we are no longer creating higher lows, which certainly weakens the bullish resurgence story. For that bullish story to become strengthened, we would need a break through $0.7564 resistance.

As such, the $0.7564 level will be a key determinant of sentiment for the day. A break back below $0.7525 would certainly cancel the recent signs of a resurgence, which despite yesterday’s selling, remains a distinct possibility.

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