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

Dollar weakness looks set to dominate, with GBP/USD and AUD/USD expected to join EUR/USD in gaining ground.

Pound and dollar
Source: Bloomberg

EUR/USD heading higher, yet resistance awaits

EUR/USD is enjoying a blockbuster week, with pullbacks being bought into.

However, while the short-term picture remains bullish, it is worth noting that we have a massive resistance level up ahead in the form of the August 2015 high at $1.1715. A break through there would provide a new 30-month high, alongside a strong chance of a bullish range breakout on the long-term picture. A move below $1.1616 would negate the short-term bullish outlook.

GBP/USD likely to turn higher once more

GBP/USD has been pulling back over recent days, as it trades within a rising wedge pattern. So far we have seen the market turn higher from the 61.8%, which highlights the potential for a rally from here.

Another move lower would mean a likely move into the confluence of the 61.8% Fibonacci and trendline support. As such, it is likely we will soon turn higher in a continuation of the recent uptrend. We would need a break back below $1.2811 to negate this bullish outlook.

AUD/USD pullback could provide bullish opportunity

AUD/USD has been pulling back over the past 24 hours, coming off the back of the incredible rally earlier in the week. That took us through a crucial resistance zone, creating a new two-year high.

The top of that previous resistance zone is $0.7835, which is the 2016 high. With that in mind, the current pullback could provide a strong buy signal should we retrace further. Interestingly the 76.4% retracement comes in almost exactly at the $0.7835 support level. As such, a bullish outlook is in play unless we break below $0.7786.

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