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

The euro is looking to capitalise on gains from yesterday, while the Aussie finds itself at a crucial point.

Australian dollar
Source: Bloomberg

EUR/USD moving higher

EUR/USD has recovered from the lows of last week, moving briefly above Friday’s high at $1.1987. However, now it needs to follow through and post a close above $1.20, something that has eluded it since 11 September.

A turn lower from $1.20 creates a lower high and raises the possibility of a move back towards $1.1850. At this point the buyers need to step in to avoid losing the post-March rising trendline.

EUR/USD price chart

EUR/USD price chart

GBP/USD hoping to push higher

Mark Carney’s speech yesterday provided little in the way of fresh bullish catalysts, leaving GBP/USD rather directionless. The pair has recovered from the lows, with a turn higher targeting last week’s peak above $1.36 at $1.3630.

Even a sustained pullback towards $1.3250 is unlikely to put a dent in the upward trend. A reversal likely requires a move below $1.32. 

AUD/USD dropping below trendline

AUD/USD had enjoyed a rising trendline from the beginning of June, until falling below yesterday. While the price has bounced off the $0.7940 level, it now needs to move back above $0.80 to put itself back above the trendline.

Since the pair has faltered over the past week at $0.8040, it needs a move back above this level to really show that the buyers are back in control. A longer-term move lower would, in the first instance, target $0.7877, the late August low. 

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