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

The dollar is showing signs of a resurgence today, yet is this simply a short-term move or something indicative of a wider shift?

Pound and dollar currency
Source: Bloomberg

EUR/USD pullback could bring long opportunity

EUR/USD has been gaining ground this week, despite the ‘no’ vote in Italy on Sunday. With price having broken through $1.0686 resistance, there is good reason to believe we are seeing a period of short-term strength within the current long-term downtrend.

The pullback seen yesterday provides a potential opportunity for long positions at a more advantageous price. The difficulty is that we have still not managed to bring about a sizeable retracement of the rally from $1.0537. However, as long as price remains above $1.0686, there is a good chance that we are going to break higher once more.

While a break back below $1.0686 would not negate the bullish short-term view, it would point towards a potential deep retracement of Monday’s rally, with $1.0600 and $1.0637 coming into view.

GBP/USD breaking lower from resistance

GBP/USD is turning lower in style, following a rally in towards the $1.2796 level. While price fell short of that resistance level by 20 points, it is clear that we have seen an environment where a great degree of skepticism regarding sterling strength has helped push it lower upon coming in towards the firm major resistance point.

As such, a bearish view is now in play unless we see an hourly close above $1.2683.

Is AUD/USD beginning to reverse lower?

The pair has sold off overnight, following a poor Aussie GDP figure. Despite the gains we have seen at the beginning of the month, there is a good chance we will now see the pair revert to its bearish wider trend.

With price breaking below the $0.7431 level this morning, we have seen a bearish signal that could drive a reversal lower today. With price currently moving higher, a 61.8%, 70% or 76.4% retracement could provide a possible opportunity for shorts. As long as price does not break above $0.7474, a bearish view is in play for a move back towards the $0.7401 and $0.7370 region.

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