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

The sell-off continues, as dollar strength drives the FX market. However, with AUD/USD at a crucial support level, there are questions being asked for some pairs. Meanwhile, GBP/USD and EUR/USD show little signs of letting up.

Pound and dollar
Source: Bloomberg

EUR/USD downtrend continues apace

EUR/USD is trading within a descending triangle formation, following on from a strong period of downside for the pair. We expect this to resolve with yet another leg lower today, with a closed hourly candle below $1.1000 providing us with the signal that further downside is impending.

The downward sloping resistance trendline provides us with a more difficult task when attaining the true swing high of note. However, it is clear that with an hourly close back above $1.1046, we would have broken higher from this triangle and solidified that by creating a new intraday trend change.

Thus such an occurrence would provide a signal that we are due a bounce for the pair. Until then, a bearish outlook remains, where $1.0952 represents the next important support level.

GBP/USD in stepped move lower

IN_GBPUSD has been in a very consistent downtrend recently, with the gradual sell-off often interrupted by a sharp sell-off and subsequent part recovery. We always seem to create new lower highs.

With that in mind, it is worth being bearish and seeing 50% and 61.8% retracements as potential opportunities to get short once more. Given the consistency of the downtrend, it is likely that we will see further selling to come.

An hourly close above $1.2325 would be required to negate the current bearish short-term view.

AUD/USD back at crucial support

The pair has sold off into trendline and Fibonacci support this morning, following on from a strong sell-off in the past two weeks. The existence of the 76.4% pullback is certainly worth noting as a potential area to take profit, with a retracement likely and bullish reversal also a possibility.

We would need to break and hold below $0.7442 to show that this recent weakness is going to translate into something bigger. Meanwhile we are likely to see a bounce from here, we would need an hourly close above $0.7590 to negate this recent downtrend and bring us back into a bullish mindset.

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