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

The dollar is coming back into focus, with potential weakness on the cards for EUR/USD, GBP/USD and AUD/USD. 

USD/GPB
Source: Bloomberg

EUR/USD showing signs of weakness

The bearish EUR/USD picture is finally starting to come through once more, with Friday’s sharp sell-off leading to a break below the near-term $1.0563 support level. This morning’s rally is expected to be a fleeting one and, as such, a break lower is expected before long.

An hourly close below $1.0552 would be a signal that this next leg lower is occurring. Should that happen, it is likely the selling will ramp up, as it adds greater confidence that this reversal is in play. A break above $1.0618 would be required to negate the bearish implications of Friday’s sell-off.

GBP/USD bullish breakout fails to extend

GBP/USD has sold off sharply over the weekend, with talk of a second Scottish referendum ruling out the nice bullish triangle breakout we had seen for the pair.

This has brought us back into the $1.2388 support level, which could be crucial to stopping the rot. Watch out for the response at this level as a bounce here could retrace a decent amount higher, given the strength of the recent weakness. Otherwise, a break below $1.2388 could provide a clue that we are set for a period of further weakness.

Is AUD/USD going to reverse or breakout?

AUD/USD continues to consolidate below the crucial $0.7732-0.7835 resistance zone, coming off the back of a strong uptrend for the pair. This is the region where we could easily see a reversal, yet price action has not yet told us that is the case.

A break and hourly close below $0.7649 would be a strong sell signal, whereas a move below $0.7606 would increase the confidence that such a move is in the offing. Until then, the uptrend remains intact and thus further gains are still a distinct possibility. 

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