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

The dollar has dominated this week, with increased rate hike expectation driving the greenback higher against most currencies.

Euro and US dollar notes
Source: Bloomberg

EUR/USD bounces from key support level

Yesterday’s EUR/USD weakness came to an end after the pair hit the February low of $1.0494, with price gaining over the short-term ever since. The upside we have seen this morning has failed to break through $1.0528, which represents a key level in determining whether we could see further short-term gains.

The next move will be dictated by a break below $1.0494, or above $1.0528. A break through $1.0528 would point towards a rally into the $1.0550 region, whereas an hourly close below $1.0494 would look to spark another leg lower for the pair. In either case, a bearish medium-term outlook remains the dominant force.

GBP/USD seeking to spark next leg lower

GBP/USD dropped into the $1.2253 support level (mid-January low), with price subsequently consolidating above that level. With price attempting to break below that support zone, a clear hourly close below here would provide a bearish continuation signal for the pair.

The next levels to watch out for are the 70% ($1.2204) and 76.4% ($1.2158) Fibonacci retracements. Alternately, an hourly close above $1.2308 would provide a warning sign that we could be due a bounce for the pair. 

AUD/USD breaks into downtrend

AUD/USD has reversed in style, with the break below $0.7649 providing us with a great sell signal. After yesterday’s sharp sell-off, it is simply a case of selling the retracements in the expectation of further downside.

An hourly close below $0.7543 would point towards the next leg lower coming into play. Alternately, an hourly close above $0.7577 would look like sparking a retracement of yesterday’s losses. In either case, further losses seem likely in the medium-term.

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.