EUR/USD and AUD/USD Test Key Levels as Gold Falls Below Trend Line

The EUR/USD is currently testing its uptrend support zone after rebounding off confluent levels at the start of the week. This area, defined by the 38.2% retracement of the June advance and the May/January swing lows, is seen as a key level to hold for bulls looking to extend their gains. A break below this threshold would be needed to suggest a more significant near-term high is in place and a larger trend reversal is underway.

Looking ahead, initial resistance is eyed at the 38.2% retracement of the recent decline, which converges on the 200-day & 52-week moving averages and the 25% parallel of the upslope near 1.1630/31. A breach above this threshold would threaten trend resumption with subsequent resistance objectives eyed at the 61.8% retracement at 1.1661 and the 50% retracement of the yearly range near 1.1704.

Meanwhile, the AUD/USD is trading just above support into the monthly close after marking an outside daily-reversal off confluent resistance on Friday at 7208/14. A breakout of this range would be seen as a positive development for bulls looking to extend their gains, with initial resistance eyed at 7184.

Finally, the XAU/USD (Gold) broke below its August uptrend after Fed Chair Warsh's hawkish remarks at the Jackson Hole World Economic Symposium. The decline has extended more than 6.3% off the monthly high, with key support now resting with the objective yearly open and the 50% retracement at 4319/20.