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

Further gains for sterling look tricky, while a dovish set of RBA minutes has put pressure on the Aussie. 

Euro notes
Source: Bloomberg

GBP/USD

Yesterday saw some recovery for cable from Friday’s sell-off, but overall bullish momentum was absent. Today’s CPI number could provide a catalyst, with a push through Monday’s high near $1.33 opening the way to a test of the Friday peak at $1.3450.

Further downside momentum would potentially find support at $1.3150 and then $1.31, while over the longer-term $1.2850 is the area to watch.

EUR/USD

The relatively narrow trading range persists here, with an ongoing recovery from Friday’s low near $1.1020 stalling below $1.1080. The pair needs to break higher today to be in with a chance of testing the $1.1140-$1.1160 area where gains have stalled since late June.

Downside moves might find support around $1.10, the key low of the past three weeks, with a longer-term view suggesting a close below $1.10 would then see the pair test the March lows at $1.08. 

AUD/USD

The market seems to have taken the Reserve Bank of Australia minutes in a fairly negative way, pushing the currency back to its lowest level against the US dollar since 8 July. The $0.7460 level is the next area to watch on the downside, with a move through here heading towards the 27 June low at $0.7330.

A move above $0.76 would be needed to reverse the bearish outlook here for AUD/USD.

USD/JPY

The rally here shows no sign of stopping yet, although given the longer-term view it still looks sensible to sell into strength. So far we have yet to see a push through the highs of Friday and Monday, around ¥106.35, and even if this occurs we still have the downtrend line off the February highs, which would likely come into play around ¥107.

Downside support is possible around ¥104.50 and then ¥104, with a bigger move raising the prospect of a test of ¥102.50 and then ¥100.

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.