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

Better eurozone news is lifting the euro, while the Aussie’s rally shows no sign of stopping.

Chris Beauchamp ChrisB_IG
Chief Market Analyst, London

Publication date : 2017-05-23T10:24:45+0100

GBP/EUR coins

Source: Bloomberg

EUR/USD bullish outlook

Dips continue to be bought here, with a flow of good economic news helping to lift EUR/USD once more. It looks like the buyers are already in full flow this morning, and $1.13 is now within touching distance.

The pair has been moving in an almost vertical line, so a more dramatic retracement could be in the offing, but it would need a drop through $1.10 to really reverse the bullish outlook.

EUR/USD chart

EUR/USD chart

EUR/USD chart

USD/JPY expects to recover some lost ground

The pair has firmly entered a consolidation period, but the question is still whether this will resolve to the upside or downside. While ¥111.68 has held as resistance, there has been little desire over the past few sessions to move towards the next area of support at ¥110.

A broader risk rally seems to be in the offing, helped by USD strength, so it would make sense to see USD/JPY recover some lost ground. A break above ¥111.68 would head towards the 100-day simple moving average (SMA) at ¥112.64, and then on to ¥114.40. A bigger bearish move needs a daily close below ¥110, and also below the 200-day SMA at ¥109.88.

USD/JPY chart

USD/JPY chart

USD/JPY chart

AUD/USD pushes higher

AUD/USD rally shows no sign of stopping, dips have been firmly bought for two weeks now, so further retracements in the direction of the (admittedly rather steep) trendline off the May lows should see further buying.

The next target is the 200-day SMA at $0.7537, with $0.7552 and then $0.7584 the next areas on the upside. A drop below $0.7440 would be the necessary first step in a bearish direction.

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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