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

Dollar strength has dragged EUR/USD, GBP/USD and AUD/USD lower, with crucial support levels in view. The ability to break below those levels would be key in determining the direction from here on in.

EUR/USD falls into crucial support zone

EUR/USD has been breaking lower since rallying into the 76.4% retracement, with the sell-off bringing a move back towards an important support zone $1.2239 and $1.2205.

With price action over recent months trading within a period of consolidation, there is a good chance we will see the price turn higher soon enough to maintain that trend. With that in mind, while we could see further short-term downside, it may make sense to await the bullish reversal rather than expecting a strong extension to the downside.

GBP/USD falling towards critical support

GBP/USD has been selling off sharply over the past week, largely thanks to a whole host of economic data out of the UK recently.

We have seen the price fall back towards the crucial $1.3965 support level, and how the pair reacts to this will provide us with guidance for the forthcoming period. As such, watch for the response to that level to provide the bullish or bearish signal from here.

AUD/USD at key support

AUD/USD has dropped back into the $0.7642 support level this morning, with the pair failing to build on the rally from the 76.4% retracement at $0.7651 earlier in the month. A break back below the $0.7642 support level would provide a wider bearish signal.

However, until then there is a chance of a rebound from this support zone, considering the importance of a break below that level. In the meantime, we have an inside trendline to contend with too, so look for the ability or inability to break below $0.7642 as a guide of where we go from here.

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