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

A potential double top for EUR/USD, alongside a shorting opportunity for USD/CAD points towards mixed fortunes for the dollar this morning.

GBP/EUR notes
Source: Bloomberg

EUR/USD heading into key support level

EUR/USD has been consolidating throughout the week, with the price moving back towards the crucial $1.1616 support level this morning. An hourly close below $1.1616 and $1.1625 support levels would complete a double top formation, with Fibonacci support levels subsequently coming into view.

On the flip side, the inability to break below this support level would point towards further consolidation. Whether or not we see that retracement, we would need a break below $1.1479 to negate the wider uptrend in play. 

GBP/USD likely to rally from trendline support

GBP/USD has dropped into trendline support this morning, with the pair breaking below the $1.3007 level on the way. That is a bit of a warning sign that could point towards a period of weakness for the pair.

However, for now it seems likely we will turn higher given the rounding we are seeing from this support line. The key is whether we will see a break back through $1.3084 or not as to whether this short-term rally is set to continue.

USD/CAD likely to turn lower from here

USD/CAD has rallied through the 50-day simple moving average (SMA), set within a clear and consistent downward channel. Each of the past five occasions we have seen the price break above the 50-day SMA it has provided us with another leg lower.

As such, shorts are preferred here, for a move back below yesterday’s low of $1.2481. A break above $1.2609 would negate this view.

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