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

A potential resurgence for the dollar appears to be in the offing, with EUR/USD trending lower and AUD/USD showing signs of indecision around a crucial historical resistance zone.

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 US dollar notes
Source: Bloomberg

EUR/USD consolidates within downturn

EUR/USD has consolidated overnight, following on from a weak end to last week. The break lower from the 76.4% retracement points toward the potential for a prolonged period of downside.

An hourly close below the $1.0603 mark would provide a near-term sell signal for another leg lower. Conversely, an hourly close above $1.0627 would point towards a bigger move higher, toward the $1.0647 region.

GBP/USD to bounce from triangle bottom?

GBP/USD is trading around an important support region, following on from Friday’s weakness for the pair. The continued rallying we have seen from this region has provided a trendline support and symmetrical triangle formation.

With the stochastic crossing in a bullish manner (which has provided reliable buy signals on past two occasions), there is a good chance we could see a bounce from here. The breakout we are looking for is either an hourly close above $1.2524, or below $1.2388. Until either happens, the triangle remains the subject of our attention.

Could AUD/USD uptrend come under pressure?

AUD/USD has posted a second consecutive doji candle on the weekly timeframe, following a strong run into the crucial $0.7730-$0.7835 resistance zone. That historical zone has seen the market turn lower on a number of occasions. With that in mind, there is a good chance we could start to see this market weaken. For a bearish view to come into play, we would need to see a break below $0.7637.

However, until then a convergence of two trendlines should form sufficient resistance to limit further upside. That said, we would need to break through the $0.7700 region to feel confident of further gains. Until then, watch out for potential reversal signs to set us up for a prolonged period of weakness for the pair.

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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.