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

US dollar weakness looks set to reverse, with EUR/USD, GBP/USD, and AUD/USD strength unlikely to last.   

EUR/USD drifting lower from triangle top

EUR/USD has been drifting lower since Monday’s peak, with the price having pushed into trendline resistance. The rally through $1.1744 could have significant implications going forward, yet for now the pair seems set for the lower boundaries of the triangle.

A rally up through $1.1717 could pave the way for another challenge of the upper end of this pattern. However, we would be looking for a break above $1.1745 to signal a bullish breakout for the pair. Until then, further downside seems likely to continue this triangle pattern. With the European Central Bank (ECB) due to release their latest monetary policy decision tomorrow, we are likely to see market positioning shift ahead of that announcement.

GBP/USD rallying into resistance

GBP/USD is moving higher, with a wider rally playing out following the break above the $1.3083 level. This looks like a retracement of the $1.3293-$1.2957 sell-off, with the price currently trading at the 61.8% Fibonacci retracement.

The is a chance of further upside, yet such a move would be likely to prove relatively short-lived, with a turn lower expected before long. A rally through $1.3293 would be required to negate this bearish expectation.

AUD/USD turning lower from resistance once again

AUD/USD is weakening from the $0.7444 level once more, representing the sixth time we have seen that level respected within the past month.

This points towards a potential period of weakness, with the $0.7360 level providing the first important level of support. We need to see a break of either $0.7444 (bullish), or $0.7310 (bearish) to highlight the next major breakout from this recent period of consolidation.

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