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

EUR/USD and GBP/USD are showing tentative signs of a recovery, while the USD/CAD fall seen earlier in the week has proven short-lived, with a bullish view back in play.

EUR/USD consolidating after trendline break

EUR/USD managed to break above trendline resistance on Wednesday, paving the way for a potential short-term recovery after a period of substantial downside.

Greater confirmation of this bullish near-term view would come in the event of a break above the $1.1750 swing high. Until then, there is still a chance of another move lower. However, with the pair having broken through this descending trendline off the back of a failed attempt to sustain the break below the critical $1.1554 level, there is a good chance we could see a more protracted move to the upside. As such, bearish positions only make sense in the event we break below the $1.1554 and $1.1509 zone.

GBP/USD resurgence somewhat muted

GBP/USD has also been showing tentative signs of strength following the recent downturn.

The ability of this pair to remain above $1.3209 is key here, where a failure to create a new low would build on the gains seen on Wednesday and Thursday. With the pair breaking through trendline resistance earlier in the week we are seeing a slowdown in the downtrend at least. With the price testing the $1.3341 swing high yesterday, a break above there would point towards a more protracted move higher, to retrace part of the downturn seen from $1.3618.

USD/CAD breaks higher after deep retracement

The USD/CAD downside seen earlier in the week has been fleeting at best, with a fall into the 76.4% subsequently being met by a sharp move higher yesterday.

This is in line with the wider bullish trend in place since September 2017. A break below $1.2743 would have been required to drive a more bearish wider view, yet for now the pullback and rally conforms to what was expected earlier in the week. We are seeing consolidation overnight, which is most likely going to be a precursor to further upside. As such, a bullish outlook remains in play with short-term intraday charts worth watching for a signal that we are set to see the next leg higher come into play. 

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