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

EUR/USD and GBP/USD strength comes under pressure, with Fibonacci resistance in play. Meanwhile, AUD/USD could sell off once more as North Korea looks likely to do more nuclear tests.

Pounds sterling and dollar
Source: Bloomberg

EUR/USD pullback unlikely to last

EUR/USD has been turning lower once more this morning, coming off the back of Friday’s rally through the key $1.2070 level. That break means we remain within an uptrend, and as such this current weakness is perceived to be short-term in nature.

Watch out for trendline and Fibonacci support in the meantime, as potential areas for the market to turn higher once more. We would need to see a break back below $1.1823 to negate this bullish view.

GBP/USD wedge points towards further upside

GBP/USD has been gradually moving lower since the $1.3224 peak on Friday. The pair is in a very clear uptrend over the short term, and shows little sign of letting up for now. The currently being formed falling wedge pattern is a bullish one, with the breakout expected to come to the upside.

Watch out for a break and hourly close above $1.3210 as the bullish breakout signal. Until then, this short-term weakness could persist. An hourly close below $1.3121 would negate this bullish outlook.

AUD/USD falls into support zone

AUD/USD has been pulling back sharply since Friday’s latest push higher. The pair clearly looks set for further gains given the current uptrend, with the confluence of trendline and Fibonacci support looking like it could provide that bullish reversal.

With that in mind, it makes sense to look for long positions as long as we do not see a move back below $0.7963.

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