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

Gary Cohn’s resignation has driven a dollar weakness move. However, with wider trends pointing towards further downside for EUR/USD, GBP/USD and AUD/USD, such short-term gains could be fleeting.

EUR/USD consolidating after sharp drive higher

EUR/USD pushed through the crucial $1.2355 resistance level yesterday, bringing about a more bullish drive towards the 61.8% and 76.4% retracements.

The former has been hit, yet another drive higher looks likely. However, given the sharp push higher yesterday, there is a strong chance we could see the pair move into retracement mode in the near term. This would be viewed as a short-term move, unless we see a break back below $1.2269 to signal a bearish shift. To the upside, look out for Fibonacci resistance at $.2461, with the pair still having a strong likeliness of turning lower given the break below $1.2205 last week. A rally through $1.2556 would be required to negate that view.

GBP/USD continues to grind higher

GBP/USD has maintained its bullish short-term path, with the price rallying towards trendline resistance.

This highlights the fact that we remain within a wider trend of lower highs and lower lows, which would only be broken with a rally through $1.4070. Until then, the current upside we are seeing is likely to be a retracement before we turn lower, with Fibonacci resistance coming into play alongside the descending trendline.

AUD/USD rally unlikely to last

AUD/USD has been moving gradually higher amid a dollar weakness story in the wake of Gary Cohn’s resignation.

However, this upside looks like part of a wider downtrend, with any price action around trendline and Fibonacci resistance looking like a good shorting opportunity. With that in mind, a bearish outlook is in place, unless we break above $0.7893.

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