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

GBP/USD looks likely to turn higher, with question marks over the direction of EUR/USD. However, comparing both European currencies, it looks like we have turned a corner for EUR/GBP.

Euro notes
Source: Bloomberg

EUR/USD consolidating within triangle formation

EUR/USD is creating lower highs and higher lows at the moment, with the pair failing to truly push out of the 76.4% retracement seen last week. This triangle formation means that we need to keep an eye out for the key near-term swing high and swing low for the directional guidance.

 

As such, watch out for an hourly close above $1.1980 for a bullish view, or an hourly close below $1.1824 for a bearish view.

GBP/USD looks set for further upside

GBP/USD is selling off this morning, following a crucial break through $1.2979 resistance. This provides a bullish short-term view, with the higher low of $1.2852 coupled with the recent rally through $1.2979 indicating the likeliness of further upside.

With that in mind, it is likely the current weakness is going to be short-lived, with a rally likely unless we break below $1.2905. Should that happen then we would be looking at a retracement of the wider $1.2852-$1.2995 leg. 

EUR/GBP upside unlikely to last

EUR/GBP is seeing a strong start to the week, following on from last week’s head and shoulders completion. With the price currently at the 50% retracement, it looks like we are going to see a Fibonacci retracement before we start to move lower once more.

As such, watch out for another leg lower from here, with a break through £0.9238 required to negate this bearish view caused by last week’s head and shoulders formation. 

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