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

EUR/USD, GBP/USD and AUD/USD are all expected to gain, as the dollar takes a break following Friday’s sharp appreciation. However, how long will this dollar weakness move last?

CFDs are a leveraged product and can result in losses that exceed deposits. Trading CFDs may not be suitable for everyone, so please ensure you fully understand the risks and take care to manage your exposure.
Euro and dollar notes
Source: Bloomberg

EUR/USD retracing from Friday’s sell-off

We are seeing EUR/USD rally after a sharp deterioration on Friday. The likeliness is that we will see the bearish medium-term view come back into play soon enough, yet there is still a strong chance of further gains meanwhile.

Thus, an hourly close above $1.1198 would point towards a push into the $1.1217 region. Given the size of Friday’s downturn, it is unlikely we will retrace enough to get to the 76.4% retracement at $1.1253. As such, we are looking for weakness to come in around the 50% or 61.8% Fibonacci level.

GBP/USD likely to push higher in the short-term

IN_GBPUSD is also in a retracement phase, which points towards short-term gains and a break back through $1.3091 resistance. The medium-term bearish view will come back into play soon enough, yet for the time being, it seems likely we will see further gains to retrace some of Friday's sell-off.

With that in mind, watch out for Fibonacci resistance as areas of potential reversal. Conversely, an hourly close back below $1.3021 would provide us with a renewed bearish view.

AUD/USD to push higher after reversal

AUD/USD is clearly in a recovery phase and after yesterday’s retracement, it seems like we are going to push higher this morning.

Yesterday saw the pair pull back from the $0.7568 resistance area and as such, both $0.7568 and $0.7573 are going to be the key hurdles to overcome for the short-term.

Until that resistance zone is overcome, any further pullback would be deemed a retracement of yesterday’s early gains, where the bullish view holds unless we see an hourly close below $0.7475.

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CFDs are a leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your initial deposit, so please ensure that you fully understand the risks involved.