FX levels to watch: EUR/USD, GBP/USD and USD/CAD
Uncertainty within the likes of GBP/USD and USD/CAD is expected to be resolved soon, while EUR/USD could provide a buying opportunity after the recent decline.
EUR/USD tumbles into potential wider retracement
EUR/USD fell below the $1.1422 mark, seemingly paving the way for a wider retracement for the pair.
The break through $1.15 last week sparked a rise in the likeliness of an upside surge after this pullback. Despite us currently having broken into a lower low, we saw something similar in late December which ultimately turned out to be a retracement of the wider rally from $1.127. As such, this is expected to be a similar situation, with the pair likely to find support before long.
Look out for the 76.4% retracement level ($1.1364) as a potential reversal point. A break below $1.1301 would be required to negate the uptrend that is currently in play.
GBP/USD regaining ground after Brexit volatility
Yesterday’s Brexit vote brought about huge volatility as expected, with severe selling in the lead up to the event subsequently reversing once the votes came in. Despite the uncertainty looming ahead, markets seem somewhat unmoved, with tonight’s vote of no confidence unlikely to succeed.
The fact that the GBP/USD broke below $1.2707 points towards the possibility of this rally falling short of the $1.2931 high. However, with the price close to that level, traders should keep an eye out for whether we break above it or not as a gauge of where we go from here. A rally through $1.2931 would signal a continuation of the bullish momentum seen over the past month.
USD/CAD consolidating after recent rebound
USD/CAD is trading within a rising triangle formation, following on from a rebound late last week.
The break through the $1.326 swing-high points towards potential upside coming into play. For now, it is worth watching a break of either $1.3226 or $1.3294 as a precursor to the next leg for this pair.
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