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

A revitalised US dollar is making itself felt throughout the FX space this morning, leading to one-year lows in cable and a retest of vital support for AUD/USD. 

EUR/USD drops through support zone

EUR/USD is pushing below the key support zone, around $1.15, that has held since the end of May. A close below $1.15 would mark a bearish development, opening the way to $1.13 in the first instance, and then down to $1.1119.

A rebound could well see the price move back towards the highs of Wednesday and Thursday, around $1.1640, but even here fresh selling could well contain any further upside. Beyond this, the $1.1750 high from late July marks a key level that needs to be broken for any sustained bullish momentum to develop.

GBP/USD pushes on downwards

Cable is now at levels last seen a year ago, with no end to the slump in sight for GBP/USD.

The $1.2773 level may serve as support, but if it is broken then $1.2635, $1.2589 and then $1.2366 are the next big areas to watch for possible buying pressure. As has been the case all week, a move above $1.32 is needed to create a new higher high, and any rally that fails to break this level would still look to be another possible selling opportunity.

AUD/USD downtrend reasserts itself

The rally seen earlier in the week for AUD/USD is now a distant memory, as the downtrend line from the January highs returns with a vengeance.

Below $0.7310, the next big area of support is the December 2016 low down at $0.7160. The 50-day simple moving average (SMA) at $0.7433 has acted to contain any rally over the past month, so a move above this and then above $0.7473 would be the conditions needed to suggest that the buyers have managed to reassert control. Rallies back towards $0.74 that fail to move higher likely remain selling opportunities.

IGA, may distribute information/research produced by its respective foreign marketing partners within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

This information/research prepared by IGA or IGA Group is intended for general circulation. It does not take into account the specific investment objectives, financial situation or particular needs of any particular person. You should take into account your specific investment objectives, financial situation or particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. In addition to the disclaimer above, the information does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any views and opinions expressed may be changed without an update.

See important Research Disclaimer.

Find articles by analysts

Find out more about