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

The dollar remains in charge, with EUR/USD and GBP/USD expected to turn lower. Meanwhile, USD/CAD has hit a crucial support level which could spark a bullish reversal for the pair.

USD/CAD
Source: Bloomberg

EUR/USD turning lower, after short-term resurgence

EUR/USD has been moving higher after the fall below the $1.1715 mark yesterday. This continues the wider downtrend, so portrays this more recent rebound as a short-term retracement before we move lower once again. Price has rallied into the 61.8% retracement so far, before turning lower this morning.

However, the bearish signal comes with a break below the $1.1735 swing low. Until then, there is a chance that we could post a deeper retracement into the 76.4% level ($1.1800). Although, as long as the price does not break above $1.1832, any such rally would be perceived as a selling opportunity.

GBP/USD rebound proves fleeting

GBP/USD is moving lower following a short-term rebound for the pair. We have seen sharp selling dominate the week, with weak manufacturing and construction purchasing managers index (PMI) surveys helping drag the pair lower.

With that in mind, it makes sense to keep an eye out for the services PMI this morning as a key driver of volatility. Given the break below the 76.4%, it looks as if we are set for further downside, with the creation of lower highs and lower lows still intact.

USD/CAD looks set for another leg higher

USD/CAD has moved back into a crucial long-term support level this morning, in what looks like yet another pullback within the recent uptrend.

This $1.2461 level is joined by the 61.8% Fibonacci and trendline support to build up a crucial area that could spark a move higher for the pair. This suggests a bullish outlook remains; a break below $1.2417 would be required to negate this bullish outlook.

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