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

Strength for the US dollar appears to be pushing the likes of EUR/USD, GBP/USD and NZD/USD lower. However, whole NZD/USD and GBP/USD look bearish, we could yet see a resurgence from EUR/USD.

Dollar notes
Source: Bloomberg

EUR/USD weakening from key resistance

EUR/USD is moving lower from the crucial $1.1824 resistance level. Above this we have a clear bullish signal following a wedge breakout.

However, for now we are seeing some hesitancy, which is likely to resolve with a move higher before long. As such, a bullish outlook is preferred unless we see a break back below $1.1740.

GBP/USD breaks key support level

GBP/USD managed to break below the notable $1.2811 support level yesterday, pointing towards a continuation of the recent weakness. Over the short term, we have a clear descending channel, with a break above $1.2807 required to point towards a bounce into the $1.2860 region.

Until then, we could see further short-term downside to come.

NZD/USD breakdown looks likely to persist

NZD/USD has been selling off sharply since breaking lower from an ascending triangle formation. The initial bearish signal of a break below $0.7305 was solidified by a move below $0.7276, giving way to rapid devaluation of the pair. Crucially while we have seen a move back below the notable $0.7223 support level, it is the $0.7202 mark which has the biggest implications. That level marks the neckline of a two-month head and shoulders formation.

As such, a continuation of the price action below $0.7202 points towards a strong move lower for this pair. Watch out for follow through from this level to point towards a period of downside for NZD/USD. If that doesn’t occur, there is a chance of a rebound given the importance of this level.

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