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

A mixed affair in the FX space, with consolidation for EUR/USD and GBP/USD coming as AUD/USD smashes lower.

Source: Bloomberg

EUR/USD rally proves fleeting

EUR/USD managed to spike higher overnight, but the move proved fleeting, with the price subsequently returning to the consolidation area once more. We are seeing little volatility this morning. Although, once things get moving, there is a good chance we could see another move higher to post a deeper retracement of the $1.1858-1.1725 drop.

However, that would be a counter-trend move, given the wider downtrend. A move back below $1.1725 would essentially negate the notion of a further upside move over the short-term, pointing towards further losses.

GBP/USD pulls back from key resistance

GBP/USD is yet to show its colours, following a rally and sell-off at the key $1.3228 resistance level this week. A break above that level would point towards a resurgence for the pair.

However, should we see a break below $1.3087, it would point towards a likely continuation of the downtrend.

AUD/USD breaks crucial support level

AUD/USD has smashed below the $0.7732 support level overnight, with weaker-than-expected consumer price index (CPI) numbers intensifying the sell-off. Now that the pair has broken key support, there is a good chance we will see further downside.

As such, look out for lower highs and lower lows, with short-term bounces likely to be sold into. We would need to break through $0.7800 to negate that outlook. 

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