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

A quiet day awaits with US markets closed for Independence Day, but a dovish RBA has hit the Aussie hard.

Euro and dollar
Source: Bloomberg

EUR/USD takes a tumble

EUR/USD took a tumble yesterday, but remained above the weekly pivot at $1.1347. It tried to move below it this morning but, so far, buyers are holding it above this point. The $1.1366 area is the one to watch, being previous resistance from last August.

A daily close below that level would continue to reinforce the view that more downside is on the way here. Below $1.13 the drop could be dramatic, unwinding much of the ground gained since the beginning of May. 

GBP/USD loses ground

Yesterday’s drop for GBP/USD also stopped at the weekly pivot ($1.2921 in this case), so we have a level against which to trade. A close below this, on the daily chart, opens the way to the 50-day simple moving average (SMA) at $1.2869, and then down to $1.2775.

Any recovery faces the task of pushing through $1.3030, yesterday’s high, and on above $1.3048, the high from mid-May.

AUD/USD with potential to bounce

The Reserve Bank of Australia’s (RBA) dovishness has prompted heavy losses for AUD/USD, but the price has now retraced to the 100-period SMA on the four-hour chart, and with momentum now heavily oversold the potential for a bounce is high.

A retracement and a new lower high below $0.77 would be needed to indicate that the sellers are back in control. 

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