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

The potential for a reversal in the dollar brings possible upside for EUR/USD, GBP/USD and AUD/USD. However, with key hurdles to overcome, confirmation is yet to occur.

Source: Bloomberg

EUR/USD begins to show signs of strength

EUR/USD has started to turn higher, following a brief foray below the crucial $1.1730 support level. This move below the wider support level means that the pair continues to create lower highs and lows on the longer-term timeframes. As such, we could have a period of upside and still remain within a wider downtrend.

With that in mind, it is notable that the price has broken up above the first swing high of $1.1763, thus negating the recent intraday pattern of lower highs and lows. A bullish view is now in place for a retracement of the wider $1.1868-1.1725 move. A break below $1.1725 would negate this outlook.

GBP/USD pulls back from key resistance

GBP/USD has turned lower from the crucial $1.3228 resistance level, with the price moving below the 61.8% retracement so far. This key resistance level is going to be an important hurdle that needs to be overcome to provide greater confidence of a bullish reversal on a wider perspective.

As such, the breakout below $1.3158 or above $1.3228 will be key in determining where we go from here. Should the price move into the 76.4% retracement at $1.3174, then this would look like a strong buying opportunity, based on the potential for a beak back up into $1.3228.

AUD/USD breaking lower once again

AUD/USD is experiencing another sharp sell-off this morning, with the price moving into the 76.4% retracement after extending lower following a double top formation. The pair showed signs of a resurgence earlier in the month, with the break up through the $0.7875 swing high following a rebound from the crucial $0.7732 support level.

There is still a good chance of another push higher soon enough, with a break below $0.7732 required to negate such a view. So, watch out for the 76.4% retracement ($0.7772) as a possible bullish reversal area for the pair. 

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