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

Potential signs of reversal for the likes of GBP/USD and USD/CAD point towards a period of possible weakness for the dollar.

Euro and US dollar notes
Source: Bloomberg

EUR/USD downtrend looks set to continue

EUR/USD has been trending lower in a very convincing manner, with price dropping below the key $1.0911 level last week. Despite a deep retracement so far this morning, we have not broken above the $1.0889 mark.

Given the sharp deterioration in the past week, we could see some form of rally before further gains come into play. However, until we see the creation of a new higher high, the bearish view remains in place. 

EUR/USD price chart

Will GBP/USD break higher?

IN_GBPUSD is showing signs of potentially reversing higher following yet another pullback into the 76.4% retracement. The key to bringing a bullish outlook is a break above $1.2241.

Should we get an hourly close above that level, then it would point towards a rise back to the $1.2325-$1.2333 region. Alternately, a break back below $1.2185 would point towards further downside for the pair.

GBP/USD price chart

USD/CAD weakening from trendline resistance

USD/CAD is showing signs of potentially reversing following a sharp appreciation at the back-end of last week. With price having rallied into a crucial five-month trendline, there is a good chance we could see this pair continue its ascending channel formation by turning lower from here.

The intraday wedge reversal has led to this current move into C$1.3323 support. An hourly close below this level would provide a bearish outlook and with so much downside in view, this could spark a sharp deterioration. We would need to see a convincing break and close above C$1.3360 to provide a sign that we are finally breaking out of this five-month channel.

USD/CAD price chart

The information on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG Bank S.A. accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it and as such is considered to be a marketing communication.

Find articles by analysts