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

GBP/USD and AUD/USD are showing bearish reversal signs, despite recent gains. With EUR/USD still in a bullish trend, will we see the dollar dominate?

EUR/USD rallying from horizontal support

EUR/USD has started to gain ground from the $1.1724 support level, which represents the highs from the beginning of last week.

With a clear uptrend in play over recent weeks, the weakness we have seen since Friday’s peak of $1.1803 is likely to start fading. As such, while further short-term downside is possible, it is worthwhile noting that it is likely to be temporary, and thus a bullish outlook remains in play unless the price falls below $1.1650.

GBP/USD instigates fight back after recent decline

GBP/USD dropped out of its recent uptrend, with the break below $1.3097 pointing towards further losses to come.

The fall below the descending trendline support on the stochastic adds to that notion that we are now in a more bearish phase, with the fears over Brexit likely to continue denting confidence in the pound. For the time being, we look set for short-term upside, but unless we break above $1.3298, any such gains are expected to be fleeting, with another move lower looking likely before long.

AUD/USD gaps lower from trendline resistance

AUD/USD has started the week in bearish fashion, with the price gapping lower after hitting trendline resistance on Friday morning.

With the price having moved into the four-hour simple moving average (SMA), alongside the swing low from Thursday, a break below that $0.7254 level will dictate the state of play going forward. Given the wider downtrend, there is a strong chance we will see the pair start to reverse lower from here, with a rally above the $0.7382 level required to negate the downtrend in place throughout 2018 thus far.

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