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

The dollar’s ascendancy seems to have come to a halt as we start 2017. However, is this just a fleeting move or indicative of something more long-lasting?

US and Canadian dollars
Source: Bloomberg

Will EUR/USD sell-off last?

EUR/USD has seen significant selling to kick off 2017, falling 0.9% since yesterday’s open. The break below $1.0462 in December seemed to highlight the potential for a sharp deterioration in January. However, the rally back above that level brings the possibility of a resurgence.

With that in mind, the bearish outlook comes back into play with a break back below $1.0372. Until then, there is still a very real possibility of a rebound, and with the pair now trading below the 76.4% pullback, this seems like an interesting area for bulls. 

Does the GBP/USD rebound have legs?

GBP/USD has been gaining ground in the final week of 2016, with the pair crucially breaking through the $1.2302 resistance level. Given that creation of a new high, there is a chance we are seeing a resurgence for the pair.

Watch out for trendline support close to current price, with a break below $1.2200 required to negate any bullish intent created by last week’s rally. 

USD/CAD trending lower once more

USD/CAD has been weakening over the past five trading days, in what looks like a market turning towards the lower end of an ascending channel which has been in place for eight months.

With that in mind, further downside is expected, with a move back below C$1.3388 pointing towards a return to the C$1.3323 region. This bearish outlook remains in play unless we see a break back above C$1.3457, which would bring a more neutral view.

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