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

Short-term weakness is expected for EUR/USD, GBP/USD and AUD/USD. However, it is only EUR/USD which remains in a downtrend.

Australian dollar
Source: Bloomberg

EUR/USD rallies into crucial resistance zone

EUR/USD has punched higher this week, following the recent bullish reversal signs. However, that run looks likely to be over, with the price moving back into the 200-period (4-hr) simple moving average (SMA). That SMA has provided near enough perfect support and resistance on the last three times of asking.

Given the continued creation of lower highs and lower lows, there is a good chance we will see this market move lower from here, respecting the moving average. We would need to see a break through $1.1858 to negate that view. However, be careful trading this market given today’s European Central Bank (ECB) meeting. 

GBP/USD turning lower after bullish breakout

GBP/USD is moving lower this morning, coming off the back of yesterday’s gross domestic product (GDP) fueled rally. That move brought about a higher low, followed by a higher high (given the break above $1.3227). It is that same $1.3227 resistance level which is now being challenged as new-found support.

Should we see an hourly close below that level, it would look likely that we would see a more protracted move lower. However, unless we see a move back below $1.3110, any such move lower would look like a short-term move before we move higher once more.

AUD/USD continues to move lower

AUD/USD is moving lower once more following a short pullback. This gives us a near-term swing high to utilize for stop loss purposes.

The price is currently challenging a long trend descending trendline dating back to April 2016. Should we see a break below that trendline, further losses would be likely.

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