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

EUR/USD and GBP/USD get back on trend with a sharp move lower, while EUR/GBP reaches an absolutely crucial resistance level that could dictate the state of play for some time yet.

Pound and dollar
Source: Bloomberg

EUR/USD could move down to $1.0952

EUR/USD has rallied into the 76.4% Fibonacci resistance, following a period of strength which progressed from yesterday’s gains. This is good thing as it provides a better price for shorts and it is likely that we will see the pair trade lower from here. We remain within a downtrend and as long as price remains below $1.1041 a bearish view remains.

The first sign that the sell-off is resuming would be a break back below this morning’s low of $1.0982. Ultimately, a break back down to $1.0952 seems likely rather than a move back above $1.1041. 

Source: Bloomberg

GBP/USD could see $1.3064

IN_GBPUSD has broken back to the crucial $1.3064 support level this morning. Whether we see a break below that level will set the state of play for the day. An hourly close below $1.3064 would set up another leg lower for the pair.

Alternately, the inability to break through this level could see another counter-trend bounce. Ultimately it is likely that we will see a break lower soon enough, with the medium-term bearish outlook coming into play. 

EUR/GBP could spark higher

IN_EURGBP has rallied into a major resistance area, with the descending trendline of a symmetrical triangle coinciding with the previous two peaks over the past week. Add to this a 100-period simple moving average and we have a massive area of resistance for the day.

How the pair responds to this area of resistance will be crucial for both the day but also the coming days and even possibly weeks. Ultimately a closed hourly candle above £0.8427 could spark a significant leg higher for the pair, with £0.8470 and £0.8628 the next key resistance levels. However, a failure to break through this level could see the pair sell-off heavily with £0.8337 and £0.8301 the next important support level.

There are two ascending trendlines that could constitute the bottom of the triangle and as such, the key for a breakout is a closed hourly candle above £0.8427 or below £0.8301.

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CFD’s zijn complexe instrumenten en brengen vanwege het hefboomeffect een hoog risico mee van snel oplopende verliezen.