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

Dollar strength dominates, with EUR/USD, GBP/USD and AUD/USD all selling off in a week which sees the latest US jobs data.

US dollar
Source: Bloomberg

EUR/USD suffers after Catalan referendum

EUR/USD is sharply deteriorating this morning, after the weekend’s Catalan referendum brought about a clear push for independence. This issue is unlikely to go away any time soon and thus we could see further downside yet as it unravels.

Looking at the chart, the retest and respect of $1.1823 as new resistance is a bearish sign, with the price likely to drop back below $1.175 to continue the downtrend of recent weeks. An inability to break below $1.1715, followed by a move up through $1.1832, would negate this current bearish outlook.

GBP/USD continues its descent

GBP/USD failed to break up through $1.3454 last week, with the current price action showing a continuation of the recent downtrend. We were looking for a directional clue to be given by a move out of the $1.3343 - $1.3454 zone, and this has clearly taken the shape of another move to the downside.

With this, we are likely to see further losses, yet this continues to look like a retracement of the $1.3153 - $1.3659 rally. As such, we could see this pair regain some ground from the $1.3272, 76.4% retracement level. 

AUD/USD falls back into key support zone

AUD/USD failed to follow through on its initial respect of a long-term historical support zone. With the price falling back below the $0.7799 level, it looks as though this downtrend has further to run from here.

A break up above $0.7860 would be required to negate this current downtrend.  

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