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

A revitalised US dollar is making itself felt throughout the FX space this morning, leading to one-year lows in cable and a retest of vital support for AUD/USD. 

EUR/USD drops through support zone

EUR/USD is pushing below the key support zone, around $1.15, that has held since the end of May. A close below $1.15 would mark a bearish development, opening the way to $1.13 in the first instance, and then down to $1.1119.

A rebound could well see the price move back towards the highs of Wednesday and Thursday, around $1.1640, but even here fresh selling could well contain any further upside. Beyond this, the $1.1750 high from late July marks a key level that needs to be broken for any sustained bullish momentum to develop.

GBP/USD pushes on downwards

Cable is now at levels last seen a year ago, with no end to the slump in sight for GBP/USD.

The $1.2773 level may serve as support, but if it is broken then $1.2635, $1.2589 and then $1.2366 are the next big areas to watch for possible buying pressure. As has been the case all week, a move above $1.32 is needed to create a new higher high, and any rally that fails to break this level would still look to be another possible selling opportunity.

AUD/USD downtrend reasserts itself

The rally seen earlier in the week for AUD/USD is now a distant memory, as the downtrend line from the January highs returns with a vengeance.

Below $0.7310, the next big area of support is the December 2016 low down at $0.7160. The 50-day simple moving average (SMA) at $0.7433 has acted to contain any rally over the past month, so a move above this and then above $0.7473 would be the conditions needed to suggest that the buyers have managed to reassert control. Rallies back towards $0.74 that fail to move higher likely remain selling opportunities.

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