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

Brexit hopes have brought about sterling outperformance, with EUR/USD and AUD/USD weakness looking likely to continue.

EUR/USD retracement phase to continue

EUR/USD has been gaining ground since the Thursday low, with a rising wedge pattern coming into play. This provides greater confidence that the pair is simply retracing the downturn from $1.1593.

As such, while it looks probable we’ll see further upside if trendline support is respected, any such gains look likely to represent a temporary rally, with a good chance of another leg lower before long. A break above $1.1593 would be required to negate this bearish outlook.

GBP/USD rallies through key resistance

Hopes of a Brexit breakthrough have helped push GBP/USD through the crucial $1.3118 level. This brings about a greater chance that the pair will move into a more bullish phase, with the previous price action taking on a bullish falling wedge formation. Much of this will be reliant on fundamental factors, with hope of a deal driving upside.

From a technical perspective, the break above $1.3117 provides a more bullish outlook, with the current move lower looking like a retracement before we move higher. However, a break back below $1.2922 would provide a bearish outlook once more.

AUD/USD downturn continues following key breakdown

AUD/USD has been gradually slowing in its decline, following on from a break below the key $0.7085 support level. That slowdown highlights the possibility of a rebound to begin retracing this recent decline from $0.7315.

However, for now it looks likely we will see further downside, with a break above $0.7087 required to begin building a more bullish short-term picture.

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