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

The dollar has rebounded after comments from Trump and Mnuchin, yet with the wider uptrend in play for EUR/USD, and GBP/USD, will this be enough to change the direction over the medium term?

Pounds and dollars
Source: Bloomberg

EUR/USD pushing higher once more

EUR/USD experienced a particularly volatile day yesterday, as the initial uptrend-driven rally was undermined by comments from the US Treasury Secretary, Steven Mnuchin, and Donald Trump regarding tax reforms and the healthcare bill. Despite this giving the dollar a boost, we have seen the price action remain above the $1.07 swing low.

As such, the uptrend remains in play until we break below that level. The inability to create a new higher low on the stochastic is a bit of a worry, as this is signaling a waning momentum. However, for now, it looks like we still have a good chance of remaining within the uptrend, with the recent pullback simply providing a deeper entry.

GBP/USD consolidates ahead of next move

GBP/USD is trading within a symmetrical triangle pattern, following a sharp appreciation earlier in the week. Crucially, we have seen the bottom of this triangle come in at $1.2775, which marks the key historical resistance level from December 2016.

Essentially, while the expectation is for another leg higher from here, a signal of the next move will come with an hourly close above $1.2859 (bullish) or below $1.2775 (bearish).

NZD/USD shows signs of bearish reversal

NZD/USD has begun to turn lower, with the creation of flat lining tops and lower lows pointing towards something remarkably similar to the price action seen back in mid-March.

With that in mind, there is a good chance that the current bounce could fall short and turn lower soon. As long as the price remains below $0.7052, it looks like we could see the pair break lower once more. The $0.7031-$0.7036 region looks particularly interesting for shorts.

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