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

Recent uptrends in GBP/USD and EUR/USD remain intact, yet AUD/USD has started to reverse following a weak CPI reading. Could the others follow suit?

Pound and dollar
Source: Bloomberg

Will EUR/USD continue its ascent?

EUR/USD has rallied into the 76.4% retracement of the sell-off from $1.0874, with the pair turning lower overnight. Given the long-term downtrend for the pair, there is a good chance we could be due a reversal lower, yet it becomes more difficult to gauge as we have no major swing lows within close proximity.

What we do have is a potential intraday topping pattern, with a break below $1.0706 marking a likely source of further short-term downside. From a wider perspective, a rally from here would need to take out $1.0874 to provide a bullish outlook for the medium term. Until that happens, the wider downtrend could kick in once more.  

GBP/USD heading higher once more

GBP/USD has been struggling to break through $1.2550 over the past 24-hours, with the pair seemingly heading back towards that resistance once more. The recent uptrend has shown little signs of slowing down and as such, an hourly close above $1.2550 would provide a good bullish signal for further upside.

Conversely, an hourly close below $1.2418 would provide a double top and bearish reversal pattern.

AUD/USD breaks out of uptrend

AUD/USD has dropped through both trendline and horizontal support overnight, following a weak inflation reading. Crucially, while we have seen the $0.7517 swing low breached temporarily, an hourly close below that level would provide greater confidence that we are going to follow that up with further downside.

It does look like we could start to see this pair turn lower from here, yet with the stochastic so oversold, we could see some form of bounce to provide us with a cheaper opportunity to get short. We would need to take out $0.7609 to be bullish once more.

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