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

The dollar takes a hit, with EUR/USD and GBP/USD rallying sharply. Meanwhile, USD/CAD is worth watching for a potential rebound in the coming weeks.

Euro
Source: Bloomberg

EUR/USD bounces through Fibonacci level

EUR/USD has managed to gain a significant amount of ground this week, with the pair rallying through a number of short-term resistance levels. We have seen the pair pass through the 76.4% retracement, only to seemingly find it as new support overnight.

A break through $1.0655 would have significant wider considerations, bringing the potential for a longer lasting push higher for the pair. Considering that this rally is coming from an attempted breakout below $1.0462 on the longer term charts, the bearish short-term view is somewhat negated. Despite this 76.4% retracement looking like a potential short, there is a clear story building on a potential longer term recovery for the pair. As such, it is worth waiting to see if we can break above $1.0655 to dictate the state of play.

EUR/USD

GBP/USD breaks key resistance level

GBP/USD managed to push through the crucial $1.2388 mark yesterday, in what was an incredible run for the pair. This brings about a more bullish scenario, with the current pullback looking like a short-term phenomenon before we move higher once more.

The long-term outlook is still bearish, yet on the medium term, it looks like we could see a break back into the $1.2500 region. As such, watch out for potential Fibonacci support around $1.2309, $1.2333 and $1.2352.

GBP/USD

USD/CAD looking for medium term recovery

USD/CAD has sold off sharply over the past fortnight, with price falling back towards the bottom of its eight-month channel. This isn’t to say that the sell-off is over, as the short-term has not shown this, yet it is likely that we will see the pair start to form those bottoming patterns soon.

Yesterday saw the market fall into the 76.4% level, which provided a strong bullish buying opportunity. Should price fall back into the 70% (C$1.3236) or 76.4% (C$1.3203) region once more, then this would provide an opportunity to get into this long-term trend at an advantageous price. 

USD/CAD

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