FX levels to watch: GBP/USD, EUR/USD and AUD/USD

European currencies are fighting back after sharp selling yesterday. However, with wider downtrends still in play, such a move is likely to be fleeting.

GBP/USD turns higher after dramatic sell-off

GBP/USD has started to regain ground lost yesterday after a tumultuous session. With Jacob Rees-Mogg seeking to spearhead a vote of no-confidence, his ability to oust Theresa May will be a key determinant for the pound going forward. If she is replaced by a Brexiteer, we are looking at a very high likeliness of a no-deal Brexit.

However, with May sticking to her guns yesterday, we are starting to see fears ease for now, with the price rising. However, this looks like a retracement, with any near-term upside likely to be met by a bearish downturn before long. As such, any deeper rebound looks like an opportunity to short GBP/USD, with a bearish outlook remaining in play unless we break above $1.3072.

EUR/USD rally likely to be met by sellers

EUR/USD is similarly gaining ground within a downtrend, with the current period of upside likely to be fleeting.

Should we see a break through the $1.15 mark then things would look more bullish, yet until that happens it looks sensible to look for the bears to come back in from a deeper retracement. As such, look out for the $1.1391 or $1.1432 Fibonacci resistance levels to come into play as possible areas to short EUR/USD.

AUD/USD at crucial area of resistance

AUD/USD continues to consolidate around the $0.73-$0.7315 resistance zone, with the pair threatening to break from the downtrend that has dominated 2018.

Keep an eye out for a break through $0.7315 as a bullish signal, with a possibility that we will turn lower remaining relevant unless we break that resistance zone.

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