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

The dollar is surging amid a flight to safety given the economic demise of Turkey. 

EUR/USD breakdown extends, as traders flock to USD

EUR/USD has extended lower following the clear bearish break that came with a move below $1.1574 last week.

That fall out of a consolidation phase led to a move in the direction of the wider bearish trend. Further downside looks likely, with any rebound likely to provide a selling opportunity. We would need a break above $1.1628 to provide a signal that this sell-off could be over.

GBP/USD continues to decline within downtrend

GBP/USD has continued its downtrend, with the creation of lower highs and lower lows providing a clear clue that the short-term trend is expected to persist.

That means a break above $1.2909 would be required to point towards a stronger rebound. However, that would be perceived as a signal of a retracement of the near-term decline from $1.3214, rather than a wider reversal signal.

USD/CAD rallies higher from wedge formation

USD/CAD has managed to extend its wedge breakout, with the initial break providing us with a nice 76.4% retracement before extending higher.

We have not seen the price move into the 61.8% retracement of the $1.3290-$1.2962 decline. Watch for how we respond to this level as a gauge of whether we are going to take a breather here or not. Should the price respect those levels, it would also give us a better idea of whether this a retracement or in fact a reversal of the wider move (bullish).

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