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

A rebound in the US dollar has dragged EUR/USD, GBP/USD and AUD/USD lower. However, with a wider bullish view in play, there is a strong chance we could see those pairs move higher in the near future.

EUR/USD retracement likely to bring another move higher

EUR/USD has gone back towards the 76.4% retracement within a recovery phase. This comes within a wider range, pointing towards a likely return to the upper echelons, around $1.2476, at some point.

While the price fell below the $1.2336 swing low overnight, this looks like a three legged retracement before we move higher once again. As such, further upside is expected from here, with a drop below the $1.2299 level needed to negate the bullish outlook.

GBP/USD continues to sell-off amid Carney comments

GBP/USD has seen a week full of sharp declines, as a host of data points have dragged the currency. Yesterday’s dovish comments from Mark Carney added fuel to the fire, with the price falling below the 76.4% support level this morning.

These fundamental factors are certainly having a profound effect upon the price, yet we need to see a break below $1.3965 to undermine the wider uptrend in play. As such, watch for a rebound or break below $1.3965 to signal the next move for the pound.

AUD/USD pullback could provide buying opportunity

AUD/USD has been retracing after breaking to the upside last week. This comes off the back of a wider fall into the 76.4% retracement of the $0.7501-$0.8136 rally.

Now we are seeing the price fall below the 61.8% retracement of the more recent recovery, where long positions look attractive from the zone between the 61.8% and 76.4% retracements. This is because a break below the previous low would necessitate a fall below the wider 76.4% ($0.7651) level. That in itself would be a particularly bearish signal and thus it makes sense to look for longs in this zone, where a break below $0.7642 would be required to negate the bullish outlook.

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