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FX levels to watch: EUR/USD, GBP/USD and AUD/USD

The dollar is regaining some ground after a sharp decline across the board. Is this the beginning of a wider bearish picture for the dollar, or just a blip?

anonymous

Publication date : 2018-11-05T09:24:31+0000

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EUR/USD pulling back after recent bullish break

EUR/USD has been moving lower since Friday morning, coming off the back of a trendline breakout. The fact that we saw a move that barely even reached the 50% level points towards the possibility of further upside.

With that in mind, the current pullback looks like a short-term retracement before we turn higher once again. A break below $1.1302 would negate that bullish short-term view.

EUR/USD chart

EUR/USD chart

EUR/USD chart

GBP/USD weakening from confluent resistance

GBP/USD managed to push sharply higher towards the end of last week, with the price rallying into Fibonacci and moving average resistance. That confluence of the 61.8% retracement, alongside the 200-day simple moving average (SMA), provides a potential turning point for the market.

That being said, there is still room for further upside over the near term, with a strong possibility of a rally into the 76.4% retracement ($1.3125). Much of the direction in the pound is going to be influenced by political wrangling over Brexit, and thus keep an eye out for any new comments from the UK or EU. For now, watch for another potential move higher, with a break through $1.3043 required to point towards another move higher.

GBP/USD chart

GBP/USD chart

GBP/USD chart

AUD/USD weakens from Fibonacci resistance

AUD/USD rallied into the 76.4% retracement last week, with the pair moving lower since. The trendline breakout seen recently points towards a possible bullish reversal for this pair, yet we would need to see a move above $0.7315 to provide greater credence to that idea.

Until then, it is worthwhile noting the ability to reverse lower from here, with a break back above Friday’s peak providing greater confidence for the bulls.

AUD/USD chart

AUD/USD chart

AUD/USD chart

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This information has been prepared by IG, a trading name of IG Markets Limited and IG Markets South Africa Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. International accounts are offered by IG Markets Limited in the UK (FCA Number 195355), a juristic representative of IG Markets South Africa Limited (FSP No 41393). South African residents are required to obtain the necessary tax clearance certificates in line with their foreign investment allowance and may not use credit or debit cards to fund their international account.

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CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money. Clients can lose more than they deposit. All trading involves risk.

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