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

Short-term dollar strength is dragging EUR/USD, GBP/USD and AUD/USD lower. However, the big question is whether this is going to be a fleeting or long lasting period of weakness.

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.

EUR/USD turning lower once again

EUR/USD is turning lower yet again this morning, in what looks like a three-stage retracement of the $1.2299-$1.2414 rally.

With the pair ascending from the bottom of a three-month range, there is a good chance we will see another leg higher before long, with a drop below $1.2299 required to negate the recent uptrend. As such, further short-term downside is a distinct possibility. Although, longs would be interesting around the Fibonacci support zone $1.2326-$1.2343.

GBP/USD pullback unlikely to last

GBP/USD has also been retracing following recent gains, with the price breaking through the crucial $1.4244 resistance level to solidify the wider bullish outlook. While we are pulling back, the price hasn’t broken below the most recent swing low of $1.4235, meaning the uptrend remains in play.

With the price currently respecting the 76.4% retracement, there is a strong possibility that we are going to see a move higher from here. Thus, a bullish outlook is in play unless we break $1.4235.

AUD/USD challenging crucial support levels

AUD/USD has turned lower into a crucial area of support, following a period of gains for the pair. With short-term price action forming the basis of a head and shoulders formation, there is a strong chance that any further downside would bring about a more bearish outlook.

As such, watch for the reaction to the $0.7738-$0.7752 support zone, where a break and close below that zone would signal a deeper impending pullback towards $0.7689.

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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.