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

The dollar has dominated this week, with increased rate hike expectation driving the greenback higher against most currencies.

Euro and US dollar notes
Source: Bloomberg

EUR/USD bounces from key support level

Yesterday’s EUR/USD weakness came to an end after the pair hit the February low of $1.0494, with price gaining over the short-term ever since. The upside we have seen this morning has failed to break through $1.0528, which represents a key level in determining whether we could see further short-term gains.

The next move will be dictated by a break below $1.0494, or above $1.0528. A break through $1.0528 would point towards a rally into the $1.0550 region, whereas an hourly close below $1.0494 would look to spark another leg lower for the pair. In either case, a bearish medium-term outlook remains the dominant force.

GBP/USD seeking to spark next leg lower

GBP/USD dropped into the $1.2253 support level (mid-January low), with price subsequently consolidating above that level. With price attempting to break below that support zone, a clear hourly close below here would provide a bearish continuation signal for the pair.

The next levels to watch out for are the 70% ($1.2204) and 76.4% ($1.2158) Fibonacci retracements. Alternately, an hourly close above $1.2308 would provide a warning sign that we could be due a bounce for the pair. 

AUD/USD breaks into downtrend

AUD/USD has reversed in style, with the break below $0.7649 providing us with a great sell signal. After yesterday’s sharp sell-off, it is simply a case of selling the retracements in the expectation of further downside.

An hourly close below $0.7543 would point towards the next leg lower coming into play. Alternately, an hourly close above $0.7577 would look like sparking a retracement of yesterday’s losses. In either case, further losses seem likely in the medium-term.

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