FX levels to watch: EUR/USD, GBP/USD and NZD/USD
The dollar rally is easing, with EUR/USD, GBP/USD and NZD/USD all gaining ground. However, with wider bearish pictures intact, this rebound could be relatively short-lived.
EUR/USD rallies back into trendline resistance
EUR/USD has started strengthening after last week’s declines, with the price having rallied into trendline resistance.
The break below the $1.1305 mark last week provides a bearish signal and allows greater confidence that this rally will fall short of the $1.1393 swing before breaking lower once again. Whether that bearish turn takes place from here or not remains to be seen, yet a bearish outlook is preferred unless we break the $1.1393 level.
GBP/USD regaining ground after head and shoulders breakdown
GBP/USD spent the end of last week falling after completing a head and shoulders formation. We are seeing the pair regain ground this morning, bringing about a possibility of a wider 76.4% retracement beyond the 61.8% retracement seen last week.
However, there is also a good chance that we are looking at a retracement of the sell-off seen from Thursday’s high. As such, further near-term upside looks likely, with the size of that upside determined by the ability to break $1.2687.
NZD/USD heading towards rebound confirmation level
NZD/USD is rising towards the key $0.6813 level this morning, with the resulting double bottom formation heightening the likeliness of a period of upside.
Coming off the back of a sharp deterioration last week, such a rebound could be notable without even requiring a break through the $0.6879 swing high. As such, keep an eye out for that $0.6813 level as a key determinant of market bias for the day ahead.
This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
See an opportunity to trade?
Go long or short on more than 16,000 markets with IG.
Trade CFDs on our award-winning platform, with low spreads on indices, shares, commodities and more.