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

Dollar strength is back in play, with EUR/USD, GBP/USD and AUD/USD all looking to continue their downtrends.

British pound
Source: Bloomberg

EUR/USD consolidates within downtrend

EUR/USD has been consolidating this week, following a strong downturn in the final week of March. The price is currently back at the 61.8% Fibonacci support level, which has been holding so far.

Given the downtrend seen of late, this looks like a short term pause rather than a bottom, with a move down to 76.4% ($1.0591) a distinct possibility. As such, while the price remains below $1.0702, a bearish outlook remains favoured, with an hourly close below $1.0651 pointing towards the resumption of the trend.  

GBP/USD sell-off continues apace

GBP/USD is continuing its descent following a rally into the 76.4% retracement on Friday. The market reversal we have been looking for seems to be working out perfectly, with the price now having broken below trendline and horizontal support ($1.2433).

From here it is likely we will continue to move lower, with the pair expected to move back into the $1.2376 support before long. A bearish outlook remains valid unless we break through the $1.2496 swing high set overnight.

AUD/USD breaks below critical support level

AUD/USD has sold off once more, with the price falling below the key $0.7587 support level this morning. This takes us to the next part of the story, with the price having switched into a bearish trend following the March reversal at $0.7750 resistance.

We are now searching for a move back down to $0.7491, which if broken would complete a sizeable double top formation. For now, we are looking for another leg lower, with rallies sold into. As long as the price does not break through $0.7625, the bearish outlook remains in play. 

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.