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

Potential signs of reversal for the likes of GBP/USD and USD/CAD point towards a period of possible weakness for the dollar.

Euro and US dollar notes
Source: Bloomberg

EUR/USD downtrend looks set to continue

EUR/USD has been trending lower in a very convincing manner, with price dropping below the key $1.0911 level last week. Despite a deep retracement so far this morning, we have not broken above the $1.0889 mark.

Given the sharp deterioration in the past week, we could see some form of rally before further gains come into play. However, until we see the creation of a new higher high, the bearish view remains in place. 

Will GBP/USD break higher?

IN_GBPUSD is showing signs of potentially reversing higher following yet another pullback into the 76.4% retracement. The key to bringing a bullish outlook is a break above $1.2241.

Should we get an hourly close above that level, then it would point towards a rise back to the $1.2325-$1.2333 region. Alternately, a break back below $1.2185 would point towards further downside for the pair.

USD/CAD weakening from trendline resistance

USD/CAD is showing signs of potentially reversing following a sharp appreciation at the back-end of last week. With price having rallied into a crucial five-month trendline, there is a good chance we could see this pair continue its ascending channel formation by turning lower from here.

The intraday wedge reversal has led to this current move into C$1.3323 support. An hourly close below this level would provide a bearish outlook and with so much downside in view, this could spark a sharp deterioration. We would need to see a convincing break and close above C$1.3360 to provide a sign that we are finally breaking out of this five-month channel.

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