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

A gradual strengthening comes amid falls in EUR/USD, GBP/USD and NZD/USD. Is this a long- or short-term phenomenon?

Source: Bloomberg

Is EUR/USD pullback a retracement or reversal?

EUR/USD continues to move gradually lower, following a rally into the $1.0630 resistance zone on Monday. The price has found support around $1.0558, with the notable swing low of $1.0543 coming within increasingly close proximity.

An hourly close below $1.0558 points toward another leg lower, yet with a bullish falling wedge in formation, it looks as if we could break higher from the current downturn. However, until we take out the latest swing high (currently $1.0588), further downside seems likely.  

GBP/USD downtrend continues apace

GBP/USD is continuing to trend lower this morning, with the price falling back below yesterday’s $1.2169 low. We are seeing the price fall into the $1.2158, 76.4% retracement support level.

However, given the February high of $1.2706 failed to break through the previous high of $1.2775, there is a good chance we will see the pair sell through this support level too. That said, with many believing we are due a bounce, this could be an interesting area to go long for bulls. But with article 50 around the corner, it is likely we will see this weakness continue due to the uncertainty it will bring.

NZD/USD sell-off remains in play

NZD/USD represents a significantly more clear-cut trend, with the market selling off sharply over the past week. This downtrend looks likely to persist, with shorts preferred on any bounce.

The 50-hour simple moving average and Bollinger band are providing a strong area to gauge where the market is likely to turn lower once more. This bearish outlook comes into question with a break through $0.7018.

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