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

A possible dollar resurgence was on the minds of traders on Friday, following a strong US jobs report. However, will today’s calm after the storm point towards a return to dollar weakness or an upturn for the greenback?

Euros and dollar notes
Source: Bloomberg

Will EUR/USD spinning top signal impending weakness?

EUR/USD has had a week to remember, with the pair pushing through to a new five-month high on Friday. However, Friday’s daily candle posted a spinning top, marking indecision. With the traditional NFP volatility creating new highs and lows on that day, we are looking for further signals to follow on from those moves.

The hourly timeframe shows that we are seeing weakness early into the session. The key level to be watching for a possible strong reversal would be 1.1335, where a closed hourly candle below this would point towards a deeper pullback with 1.1291 and 1.1257 in view.

However, until that happens, we remain within an uptrend and there is a good chance we will emerge from this NFP volatility in the direction it entered it. Thus an hourly close above 1.1412 would point towards a possible move back to 1.1438 and even onwards to 1.1495 resistance.

GBP/USD looking bearish once more

The pair sold-off sharply on Friday, highlighting the fact that the high on the last trading day of March marked a top. This means that we are looking towards a wider creation of lower-highs to accompany the bottoms around 1.4057.

That is a warning sign and thus we expect further losses leading into that same level. As such, another leg lower seems likely, with 1.4122 and 1.4057 the next major support levels. A strong signal that we are seeing another sharp move lower would be a closed hourly candle below 1.4170.

Near term resistance is found at 1.4241, which is the 50-period simple moving average (SMA) (4-hour) and 200-hour SMA.

AUD/USD rolls over for bearish ST view

The pair has clearly rolled over on the shorter-term intraday timeframes, following on from Friday’s low of 0.7599. We are in a strong uptrend since the beginning of March and until we see a move back below 0.7477, this remains in play.

However, the rolling over we are currently seeing points towards a more protracted move lower within this uptrend. The last deep retracement found us back at the 76.4% retracement. That points towards the use of Fibonacci for support levels and thus any further downside would look at 0.7600, 0.7571 and 0.7535. 

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