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

The pound is racing higher versus the dollar and the euro, while the Aussie has nearly reached key support. 

Dollar and pound notes
Source: Bloomberg

GBP/USD highest since October

It certainly was an interesting day for GBP/USD yesterday. A huge spike took the price to its highest level since early October. It seems that more gains are likely, particularly since the market remains fundamentally short sterling.

The upside targets on a longer-term view become $1.3058 and then $1.3427, and while we may see some of the sharp upward move unwound, it looks like potential support will develop around $1.2775 and $1.2706. 

EUR/GBP pushed up by uncertain French election

The sharp drop in EUR/GBP since the March high has gone relatively unnoticed, but with the French election looking tough to call, euro weakness and sterling strength have combined to push the pair back to £0.8304, last seen in mid-November.

A break below here opens the way to £0.8251 and then £0.8117. We can expect some resistance to materialise around the £0.85 level, and then at £0.8550.

AUD/USD facing big drops

Heavy declines over the past two days raise the prospect of another test of the $0.7495 area. This was key support earlier in April and also in early March.

A break below here suggests a move to the April low at $0.7473, but below this we would have to look to $0.7364 and $0.7310. Meanwhile, any intraday rally has to break $0.7562 and then $0.7610 to put AUD/USD on a more bullish footing. 

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.