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

EUR/USD and GBP/USD are both showing signs of continued decline, while the USD/CAD sell-off is reaching a point where a rebound is looking increasingly likely. 

EUR/USD looking bearish after recent breakdown

EUR/USD fell below the critical $1.1574 support level last week, breaking out of a three-week range for the pair.

This points towards a likely continuation of the bearish trend that took hold throughout April and May. With that in mind, further downside looks likely, although a break through $1.1610 resistance would point towards a short-term rebound to retrace the sell-off from $1.1744.

GBP/USD sell-off gathers pace

GBP/USD has continued to pull back, with the pair looking set to continue the wider downtrend.

A break below $1.2958 looks likely, upon which we would have proof that the downtrend continues given the creation of another lower low. Any rebound would have to break through $1.3173 to negate this bearish view.

USD/CAD wedge points to a short-term downside

USD/CAD has been gradually declining lately, with the price trading within a falling wedge formation. With the price currently trading at the top end of this pattern, another move lower looks likely from here.

However, given that a wedge formation will typically provide a reversal breakout, there is a good chance that the ultimate resolution of this sell-off is a rebound. With that in mind, watch for an hourly close above $1.3039 as a signal of a potential bullish shift in sentiment. Until then, a short-term downside looks likely. 

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