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

Dollar strength has sent EUR/USD, GBP/USD and AUD/USD lower. With those markets consolidating overnight, could we see another move lower before long?

Dollar and pounds
Source: Bloomberg

EUR/USD tumbles after Fed meeting

The EUR/USD recovery was undermined after yesterday’s hawkish Federal Reserve meeting, with the dollar gaining ground across the board. That potential failure to create a new higher high could prove costly, should we see a move back below $1.1837.

That would not only confirm the lower high, but also complete a lower low, bringing a bearish outlook for the pair. For now, the consolidation we are seeing looks likely to resolve with another move back to the downside. However, should that occur, $1.1837 remains the key level to watch.

GBP/USD retracement looks set to persist

GBP/USD has also moved lower at the hands of a stronger dollar, with initial UK retail sales gains dropping off. The consolidation that we are seeing at the moment looks unlikely to persist, with the pair looking to retrace more of last week’s sharp appreciation.

A break above $1.3659 would negate the short-term bearish outlook.

AUD/USD pullback brings pair closer to key support

AUD/USD has sold off sharply overnight, coming off the back of a bullish break through $0.8035 yesterday. This has brought us close to the $0.7938 support level, which if broken, would signal a more bearish shift.

With that in mind, there is a good chance we could start to see some form of a bounce from this region, where a move back below $0.7938 would point towards further losses.

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