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

Sterling strength has been driving GBP/USD higher and EUR/GBP lower. Meanwhile, EUR/USD continues to consolidate, as we await the triangle breakout.

Pound sterling
Source: Bloomberg

EUR/USD triangle continues to dictate

EUR/USD has rallied back up to the top end of a symmetrical triangle formation once more this morning, with the pair continuing to consolidate.

The breakout signal remains a move through the first swing high or low. As such, watch out for an hourly close above $1.1941 for a bullish outlook, or below $1.1868 for a more bearish view.

EUR/USD price chart

GBP/USD breaks higher once more

Yesterday’s GBP/USD spike took the pair to a near month-long high, in a move that provided a continuation of the bullish reversal that has been forming in recent weeks. This bullish phase looks like a retracement of the wider move from that $1.3269 high. As such, it makes sense to look for $1.3080 and $1.3152 (61.8% and 76.4%) as targets for when this rally might come back under pressure.

Further upside looks likely, yet there is a threat that we could start to see the pair retrace yesterday’s sharp rally. A bullish outlook remains as long as we remain above $1.2909, with a move lower providing us with a potential bullish entry at Fibonacci support.

GBP/USD price chart

EUR/GBP trading lower, as wedge forms

EUR/GBP dropped into a new lower low yesterday, following a 76.4% retracement earlier in the week. We are now seeing a move higher from trendline support, indicating the creation of a falling wedge pattern. That is a bullish formation, which points towards an eventual bullish breakout.

However, until we see a move through £0.9227, a bearish outlook remains, with the 61.8% retracement at £0.9191 looking like an attractive area for shorts if we get up to the point.

EUR/GBP price chart

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