GBP/USD staging a recovery
GBP/USD saw a strong selloff yesterday, followed by a strong rally, where the bottom of the market found trendline support dating back to September.
This trendline has previously marked the bottom of the market and thus brings into question whether yesterday will mark the bottom for now.
Given the clear upside we are seeing, further gains seem likely, but the key level to watch is $1.5061, which if broken would provide the signal that we are bullish GBP/USD. Resistance levels are $1.5053, $1.5061, $1.5078 and $1.5115.
A closed candle below $1.4994 would bring back the bearish view, where $1.4956 would represent the next support level of note.
Will EUR/GBP weakness return?
EUR/GBP has been rallying heavily over the past week, taking out a number of key resistance levels on the way. However, with GBP/USD rallying so heavily, it is worth watching for a possible move in EUR/GBP to give back some of those gains.
Price action is stalling somewhat, with trendline support currently holding price up. However, a closed hourly candle below £0.7244 could instigate a move lower for the pair, where support levels of £0.7200 and £0.7163 are of note.
That said, until we see that break through £0.7244, further upside is certainly a possibility, where £0.7303 represents the next big resistance level.
AUD/USD breaking lower once more
AUD/USD has been gradually moving higher overnight, as the pair retraces some of the significant losses seen in the early part of the week.
However, there are signs that we could be on the cusp of another leg lower, which is dependent on a break of the $0.7208 level. A closed candle below $0.7208 would resume the bearish outlook, with $0.7200, $0.7286 and $0.7170 the next support levels.
Alternately, a closed candle back above $0.7237 would bring a more bullish bias, with $0.7245, $0.7250 and $0.7256 the next key resistance levels.