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

With a bullish outlook for EUR/USD and AUD/USD, will we see GBP/USD confound the bearish dollar picture after last week’s election result?

GBP notes
Source: Bloomberg

EUR/USD weakness could be short-lived

EUR/USD has been moving lower over recent days of trading, coming off the back of a break through the key $1.1268 swing high. That break means that we remain within an uptrend and as such this short-term weakness is likely to be a retracement rather than a reversal.

So far we have seen the price retrace to the 61.8% level, yet we could quite easily move lower once more. Another move into the $1.1151- $1.1167 support zone (76.4-61.8%) would provide a good buying opportunity. As long as the price doesn’t break below $1.1109, a bullish outlook remains in play. 

GBP/USD expected to break lower once more

GBP/USD sold off sharply on Friday following the unexpected hung parliament result. While the price stabilised since, we have seen a symmetrical triangle formation in play with the failure to break through $1.2780. Should that occur, then we could be looking at a more bullish picture.

However, the flip side of that is a break and hourly close below $1.2706, which would provide us with a bearish continuation signal. Considering the move into here, another drop seems likely. Still, for safety, keep an eye out for a break through either support at $1.2706 or resistance at $1.2780.

AUD/USD triangle points towards further upside

AUD/USD is trading within a descending triangle formation, following a strong start to the month. This pattern is expected to resolve in a break higher, with any move back into the $0.7525 region looking like a great buying opportunity.

As long as the price remains above $0.7500, a bullish outlook remains in play. 

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