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

The euro and sterling are trying to rally for a second day, but moves in the FX markets are likely to be tentative until the new Federal Reserve chairman has made his comments later. 

All trading involves risk. Losses can exceed deposits.

EUR/USD aims to build on strong support

A tentative recovery is in place here, after EUR/USD's attempt at a rally yesterday was knocked back.

However, the price succeeded in holding above the lows of last week around $1.2260, so if this continues to hold the case for the upside increases. A close above $1.2360 would be an encouraging sign, and would open the way to $1.25 and higher. A drop back below $1.2260 would suggest more losses are likely, with $1.2165 and $1.2092 as potential support.

GBP/USD hopes for more gains

Here too for GBP/USD, an attempt at a rally was defeated yesterday.

However, the push higher from the lows of last week is still intact. The first targets to watch are $1.4070 and then $1.4145, and then on to the January high at $1.4345. A turn lower would head towards $1.3836.

AUD/USD constrained by USD strength

The US dollar appears to be in the ascendant here for AUD/USD, with signs of exhaustion despite the strong bounce at the end of last week.

Gains have been constrained at the $0.7849 level, so this and then the $0.7877 level are the ones to watch. A close above the latter would open the way to $0.80, while support is possible around $0.7807 and then $0.7748.

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