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

Euro strength has abated somewhat, but it looks like a temporary setback for the currency. 

Euro and pound
Source: Bloomberg

EUR/USD slows down after a new high yesterday

Having pushed to a fresh high yesterday, it is not surprising to see some weakness coming through for EUR/USD. First support is to be found at $1.19, and even if this breaks the $1.17-$1.18 area itself is still likely to be a tough nut to crack for euro bears.

It makes sense to keep buying the dips here, unless and until the pair decisively breaks the 50-day simple moving average (SMA) that continues on an upward trajectory. A push back above $1.1976 leaves the pair free to contemplate a fresh attempt to break Tuesday’s high at $1.2074.

EUR/GBP pullbacks meet buying

A similar picture prevails on EUR/GBP, but in this case it is the 50-period SMA on the four-hour chart that has acted as strong support over the past month.

We are yet to see a meaningful lower high or a lower low, and until that happens, pullbacks should continue to see buying.

AUD/USD remains bullish

The June uptrend remains intact on AUD/USD, with the drop from the late July high being followed by a steady push higher.

It looks like some further weakness could be in order, but the rally back above the mid-August high suggests that we will see another attempt to move above $0.80. It will require a move back below $0.7830 to negate the bullish outlook. 

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