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

EUR/USD, GBP/USD and AUD/USD look likely to rebound over the short term. However, questions remain over whether we are set for another bearish phase before long.

EUR/USD pulls back from recent uptrend

EUR/USD fell below trendline support, with the pair moving into a crucial area of support that will determine the outlook for the week ahead. The pair needed to either break through $1.1746 for a more bullish outlook, or below trendline support to prove that we could be set for a more bearish phase.

Since we saw the latter, we would need to see a break below the first swing low of $1.1594 in order to prove that this is a bearish reversal/retracement. With the 200-day simple moving average (SMA) also featuring that level, the fact that we have seen the pair hold up at this point means we are waiting for a break or rebound to show the way forward over the near term. 

GBP/USD falls into trendline support

GBP/USD has dropped at the start of the week, following negative Brexit rhetoric from the EU. This has brought us back into trendline support, with the question over whether we are set for another rebound coming into play.

A break below $1.2845 and $1.2799 would signal another wider breakdown coming into play. Until then, watch to see if we get a response from trendline and Fibonacci support as a gauge of whether we turn higher once more.

AUD/USD starts the week in bullish fashion

AUD/USD is kicking off the week with a sharp move higher, despite a poor retail sales number overnight. The drop below $0.7238 and $0.7202 last week points towards the wider bearish picture remaining in play.

However, given the size of the drop last week, it looks like we could be set for a retracement phase from here. With the price rebounding from very close proximity to the $0.7160 historical low from January 2017, this adds credence to the idea that we will see further upside for the short term. As such, watch for further upside for now. Although, for the most part this looks like a retracement rather than a bullish reversal. Thus, a bearish outlook remains unless we see a break above $0.7362.

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