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

The trend is your friend as EUR/USD and GBP/USD rallies continue, while AUD/USD maintains its descent. 

Pound and dollar notes
Source: Bloomberg

EUR/USD breaking higher towards key resistance level

EUR/USD is breaking higher from a bullish falling wedge pattern, which retraced into the 61.8% Fibonacci level. We have a clear uptrend in play throughout March so far, yet with the $1.0829 level ahead, there is a major hurdle to overcome before we can say with confidence that this rally is set to continue.

As such, watch for a four-hour close above $1.0829, which would provide a strong continuation signal as we move into next week. Alternatively, a failure to break through $1.0829 could provide a clue that this resistance level is going to become a roadblock to further gains.

GBP/USD weakness unlikely to last

GBP/USD has weakened overnight, following a period of strength over recent weeks. This appears to have provided us with a good area to get long once more, with the price failing to break back through the $1.2463 level.

The stochastic is turning higher from oversold, a signal that has provided us with bullish reversals on the past three occasions. Watch out for continued higher highs and higher lows as a signal that we are going to see further upside within this clearly bullish trend.

AUD/USD continues descent

AUD/USD is continuing to pull back, off the back of a rally into a critical resistance point of $0.7732. That resistance has been respected, with the price moving lower since.

Further losses seem likely from here, with the continued creation of lower highs and lower lows key to maintaining this short term downtrend. Two subsequent 61.8% retracements provide a clue that we could see a deeper retracement from here. However, as long as the price remains below $0.7641, then further losses look highly likely. 

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