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

EUR/USD and GBP/USD both see sharp selling to end the week, yet with EUR/USD at a critical support level, a break below here would point towards significant downside to come for both.

GBP
Source: Bloomberg

EUR/USD falls into critical breakout support level

EUR/USD seemingly left behind the triangle formation of old, instead focusing on the two key breakout points of $1.1745 and $1.1575. It is the latter which is now coming into question, with a break below this level pointing towards a potential bearish extension from here.

With that in mind, watch for how EUR/USD reacts at this level as a determinant of future price action. An hourly close below $1.1575 would point towards a bearish breakdown from here. Otherwise, watch for a potential rebound to continue the wider consolidation that has been in place over the past month.

GBP/USD breaking lower from retracement

GBP/USD been selling off relatively consistently since the rally into the 76.4% retracement last week. This points towards a continuation of the wider downtrend, with a fall below $1.2958 likely before long.

The intraday head and shoulders pattern completed this week also adds greater credence to the bearish picture. As such, further downside looks likely from here, with a rally through $1.3173 required to negate this bearish view.

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