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

Choppy price action for European currencies sees GBP/USD breaking lower as EUR/USD attempts to bounce from trendline support. With AUD/USD seemingly on the turn higher, there is reason to believe the dollar strength story may come under pressure.

Euro and dollar notes
Source: Bloomberg

EUR/USD bouncing from trendline support

EUR/USD has been a bit of a choppy pair to trade this week, with initial breakdowns not following through, only for the pair to post new intraday highs. This looks similar to the rising channel that held for the first part of the week, upon which we finally saw price break lower. This is also expected to be the outcome from this current ascending channel pattern.

With price breaking higher from trendline support, there is a good chance we could see another short-term bounce from here. We would need to see an hourly close below $1.1219 to bring the bearish medium-term outlook back into play. 

GBP/USD resurgence coming into question

IN_GBPUSD is turning lower from trendline resistance this morning, with the pair trading within a symmetrical triangle formation. We are breaking through trendline support, yet the key here is the ability to post an hourly close below $1.3179 (for a bearish outlook) or above $1.3279 (to provide a bullish short-term outlook).

Is AUD/USD on the cusp of a reversal?

AUD/USD has sold off into trendline support, at the bottom end of a symmetrical triangle pattern. With yesterday’s completion of a double bottom, the pair saw a strong surge into $0.7525 resistance. With that in mind, there is a good chance that this current pullback is temporary and precedes another move higher.

As such, longs around $0.7462 and $0.7467 would be interesting as we often see deep retracements at markets turns. This bullish outlook remains in play unless we see price break back below $0.7442.

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