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

US dollar strength is expected to dominate the FX markets once more today, with any EUR/USD, GBP/USD and AUD/USD resurgence expected to be sold into.

EUR/USD forex pair
Source: Bloomberg

EUR/USD resurgence unlikely to last
EUR/USD saw yet another sharp move lower yesterday, continuing the selloff that has characterised this week’s trading. We have seen a shallow retracement higher overnight, yet given the medium-term reversal we are seeing, this is unlikely to last.

As such, we prefer to sell into rallies, with the bearish view being negated by a closed hourly candle above $1.1529. Important resistance levels that could force the next move lower are taken from Fibonacci retracements alongside the $1.1465 Wednesday low. 

GBP/USD expected to break lower
GBP/USD has been largely sideways over the past 48 hours, following a sharp move lower on Tuesday. The ability to break through the current support area of $1.4444-$1.4459 will be key to whether we are going to see another leg lower today.

As such, an hourly close below $1.4444 would signify a likely spark for another sharp deterioration in the pair. However, an inability to break this level would look to resume the recent range, with a move back towards $1.4514.

AUD/USD downtrend continues apace
The downtrend in AUD/USD saw another major leg lower this morning, following an inflation downgrade from the RBA. We are seeing a clear trend in place here and as such any further retracements higher would be seen as a selling opportunity.

Ideally we would see a pullback to the 76.4% Fibonacci retracement at $0.7478, or else yesterday’s low of $0.7450 before selling off once more. We would need to see an hourly close above $0.7517 to negate this bearish view. 

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