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

European currencies could suffer with the ECB in view. However, USD/CAD looks likely to continue weakening in the near future.

EUR/USD reaches crucial resistance zone

EUR/USD has rallied into the $1.1745 resistance level once more, with the pair showing the potential for a bullish breakout. The trendline has been redrawn to reflect that this recent peak coincides with the mid-May and early-July tops.

Ultimately it will all come down to whether we see that $1.1745 level broken or not. Should that occur, then we would be looking at a potential period of upside. Otherwise, there is a strong chance we will see weakness creep back in to maintain this symmetrical triangle formation.

GBP/USD turning lower from 76.4% Fibonacci

GBP/USD is reversing from the 76.4% Fibonacci level this morning, with the 200-day simple moving average (SMA) on the four-hour chart providing a confluence of resistance.

The wider bearish trend suggests that this is likely to be the end of this period of strength. With the European Central Bank (ECB) set for their latest monetary policy decision today, there is a chance we will see ECB president, Mario Draghi, drive losses for European currencies. A break through the $1.3293 level would signal an end to this bearish outlook.

USD/CAD breakdown continues

USD/CAD has been moving lower from the 76.4% retracement over the past month. With the price having broken below the $1.3064 swing low and long-term ascending trendline, there is a strong chance we will see the pair lose ground over the coming weeks.

Given the sharp sell-off yesterday, there is also a chance for a short-term rebound, which would largely be seen as a chance to short USD/CAD. A break above $1.3191 would be required to negate that bearish view.

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