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

The dollar is coming under pressure this morning, with EUR/USD in particular spiking higher. However, could this move be on borrowed time?

Euros and dollars notes
Source: Bloomberg

EUR/USD rallies out of basing pattern
EUR/USD is rallying through the crucial $1.1230 resistance level this morning, providing us with another higher high on the four-hour chart. This provides us with a good overall perspective to show that the current resurgence looks like a retracement of the referendum downturn.

As such, with price approaching the 76.4% retracement at $1.1305, we are looking for shorts around that area to get back on the long-term downtrend. Clearly, that would mean there is a strong chance of further upside until then. We would need price to break through the $1.1428 resistance to negate that bearish view. 

GBP/USD rallies into key resistance
IN_GBPUSD is seeing a resurgence this morning, following yet another leg lower yesterday. Ultimately, there are two potential swing highs that the pair is likely to turn lower below.

Firstly, $1.2945 should hold as resistance, yet should we see an hourly close above here we would be looking for shorts again around $1.2995. We are in a clearly defined downtrend and as such, unless we see an hourly close above $1.3035, a bearish outlook remains in place.

USD/CAD downtrend to continue
USD/CAD has posted yet another sharp leg lower this morning, as the deterioration that has been in place over recent weeks continues. Clearly it is a very reliable downtrend and thus while it seems a little late to go short here, any decent sized pullback will not doubt be perceived as a good area to get short once more. 

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