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

The dollar sell-off has provided the likes of EUR/USD and GBP/USD with substantial gains. However, with significant event risk ahead, will we soon see the wider trend come back into play?

New Zealand dollar notes
Source: Bloomberg

EUR/USD continues to gain ground

EUR/USD saw yet another strong move higher yesterday, following a very similar retracement to that seen in late-July. We are seeing the pair pull back overnight which is expected to ultimately resume its uptrend before long. Essentially, we would need to see an hourly close below $1.1155 to negate this short-term uptrend.

Much like the past two pullbacks, there is a good chance the signs of a recovery will come in a shorter timeframe. Thus look for a new higher high being created on a shorter intraday basis such as the 15-minute chart.

Despite this recent uptrend, we remain within a downtrend and as such, the 76.4% retracement at $1.1306 remains an interesting area to go short once more for the longer-term position to come back into play.

GBP/USD retraces within uptrend

IN_GBPUSD has continued to move higher, with a cluster of simple moving average supports providing enough to push the pair on another leg higher. Crucially we have seen the important $1.3289 resistance level broken, which is now forming potential support following a sell-off from trendline resistance. An hourly close below this level would point towards a deeper retracement.

Much like the euro, the current GBP/USD strength appears to be more of a dollar weakness story than a sterling strength one. As such, the long-term downtrend is expected to come back into play before long.

However, we would require an hourly close below the $1.3162 swing low to negate the current higher highs and higher lows trend in play.

Will NZD/USD find buyers once more?

IN_NZDUSD has been selling off sharply since yesterday’s weak GDT number. However, this comes in the face of a clear two-week rally. With that in mind, the 76.4% retracement which price is currently resting upon seems like an interesting area for buyers to come back into play.

The only warning sign in this recent rally forms what looks like a retracement of the wider sell-off in mid-July. With that in mind, an hourly close below $0.7162 could provide us with a topping pattern for the wider bearish outlook to come back into play. 

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