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

US dollar weakness appears to be a theme as we close the week, as EUR/USD, GBP/USD and AUD/USD are all gaining ground. But with EUR/USD and AUD/USD at potential reversal points, could we see the dollar's come back?

Euro notes
Source: Bloomberg

EUR/USD could reverse lower

EUR/USD has continued to grind higher, amid a rebound for the pair off the back of this week’s key bearish break below $1.0525. This rally is expected to fall short and turn lower soon enough, yet the question is where will that happen? The safest option is to say the $1.0679 swing high is the best level to be drawing your fibs on, with a break above that level being the event to negate the bearish view.

However, with price in a rising wedge pattern, there is a very good chance we could see a break lower before the $1.0630 shorter-term swing high. As such, look for shorts around the 76.4% retracement, and at $1.0598 for a move back down to $1.0494. With the stochastic overbought and tightening (last bearish cross marked reversal lower), coupled with the price reaching the apex of this bearish wedge, it seems likely the bears will come back soon enough. 

GBP/USD breaks higher from triangle

GBP/USD managed to break higher yesterday, working out perfectly following the initial signs of a bullish move late on Tuesday. The break through $1.2483 provided the first new high, which when followed up by a 76.4% retracement, gave an ideal entry point.

The sharp rally through $1.2508 now gives us greater confidence that we will see further gains, yet look out for a potential pullback if looking for new entries. A break back below Wednesday’s low of $1.2420 would negate this bullish view.

AUD/USD rallies into major resistance zone

AUD/USD has continued to gradually gain ground, with the pair pushing into an absolutely critical resistance zone. This zone is a prime area for a potential reversal, yet for that to come into play we would need to see the price breaking to a new lower low.

With that in mind, watch out for a potential break lower, an hourly close below $0.7649 would bring a more bearish outlook. Until then, while the uptrend remains intact, the existence of this major resistance zone ahead means it does not make sense to get long for now.

AUD/USD price chart

AUD/USD price chart

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