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

Both EUR/USD and GBP/USD have been regaining ground after recent declines. However, there is a growing feeling that we could see both pairs turn lower to continue recent trends.

EUR/USD rallies into trendline resistance

EUR/USD is starting to show signs of weakness following a rally into trendline resistance at the beginning of the week. Respect at this level would continue the symmetrical triangle formation in play over recent weeks.

Ultimately, we would need to see the price rally through $1.1745 to signify the start of a bullish breakout phase. Until then, a continuation of this pattern looks likely, with a move lower from here expected.

Minimal GBP/USD rebound raises breakdown chances

GBP/USD has been gradually gaining ground this week, following a clear respect of the 76.4% retracement on Thursday. A rally back above that $1.3214 level would constitute a potentially bullish signal to partly negate the downtrend in play over recent weeks.

However, the gentle slant of this recovery signals a possible impending breakdown for the pair. A drop below $1.3083 would confirm this bearish outlook.

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