FX snapshot – EUR/USD, GBP/USD, EUR/GBP, AUD/USD

Further downside appears to be on the cards for both sterling and the euro against the greenback. However, with AUD/USD on the rise, we could see the dollar lose ground in that pair.

GBP/USD
Source: Bloomberg

EUR/USD selling off from channel top
EUR/USD is selling off heavily from the top of a descending channel that has been in play for a month now, with price moving towards the key 50-day simple moving average (SMA) (1.0814) and $1.0808 support levels. The ability to close convincingly below $1.0808 will largely dictate the state of play, with a high likeliness of a strong move lower should that occur.

Given the clear downtrend in play throughout this week so far, further downside seems the most likely event, yet given the importance of the $1.0808 level, it seems prudent to await a break first. A close below $1.0808 would point towards $1.0796, $1.0781 and $1.0773 as the next support levels.

However, should we see a closed hourly candle above $1.0840, this would point towards a possible rally, with $1.0880 and $1.0905 the next key resistance levels.  

GBP/USD selling off once more
GBP/USD seems to be turning lower once more this morning, following another overnight/early morning rally. This seems to be somewhat of a trend of late, with four out of the last five trading days having seen the daily high set between midnight and 3am. So far today, we have seen the pair top off at 2am.

The key signal for another leg lower would be a closed hourly candle below last night’s retracement at $1.4424. Alternately a close hourly candle above $1.4476 would certainly mark a change from the recent norm and could see the pair rally higher with $1.4506 and $1.4566 resistance levels in view.

A close below $1.4424 would look towards $1.4352 as the next support.

EUR/GBP upside likely
EUR/GBP has been moving through a crucial resistance zone, which largely capped any upside moves throughout 2015. The pair is clearly trading within a rising wedge and this pattern seems likely to hold for now.

With this in mind, further gains seem likely for today, with the £0.7550 level representing the top of this formation where the question would be asked again. This bullish view holds unless we see a closed hourly below £0.7470, which would bring a more bearish view for the pair. 

Has AUD/USD bottomed out?
AUD/USD has created a relatively consistent bottoming formation this week, with lower lows and highs turning to higher highs and lows. This clear curve on both sides of price action provides a good chance of a bullish reversal to retake some of the losses seen last week.

With that in mind, a bullish view now holds, with $0.7050 the next resistance level to break through. This bullish view remains unless we see an hourly close below $0.7000.

Resistance levels of note are at $0.7050, $0.7077 and $0.7097, with support levels at $0.7000, $0.6963 and $0.6938.

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