With EUR/USD above major support and GBP/USD below key resistance, either one will see a break back or else we could see a divergence of the two main European currencies.

Pound and dollar
Source: Bloomberg

EUR/USD bounces from key support

Last week saw price sell off heavily to $1.0796 support, only to subsequently bounce up to create a new intraday high. This provides us with a good chance that we are seeing a bottom occur, at least a short-term bottom.

While we are seeing the pair begin to selloff this morning, it seems likely that this will stop short of Friday’s $1.0808 low. Thus unless we see price break and close below $1.0796, a bullish outlook is preferred with resistance levels of $1.0897, $1.0925 and $1.1012 in view.

Below $1.0796, selling is preferred, with $1.0762, $1.0689 and $1.0674 representing key support levels. 

GBP/USD consolidating below key resistance

GBP/USD continues to trade somewhat sideways, following a breakout of a long-term falling wedge last week. The retest of $1.4951 resistance retains a bearish view and thus leads us to believe we will see another move lower in the coming days.

The signal for another move lower would be an hourly close below $1.4885, where $1.4865, $1.4831 and $1.4634 represent the next support levels of note.

A closed hourly candle above $1.4951 would provide a more bullish view, with $1.5000, $1.5027 and $1.5107 the next resistance levels. 

AUD/USD rallies back up through support

AUD/USD managed to claw back some of the losses seen in the early part of last week, to push back above the key $0.7159 resistance/support level.

This morning is seeing price respect this level once more and as such, it is likely we will see sentiment based upon how it responds to $0.7159.

Should price hold up on $0.7159, then we could see it rally back towards Friday’s high of $0.7200, whereas a move back below would look like further losses, with $0.7120 the next major support level. 

USD/CAD consolidating below resistance

USD/CAD is consolidating below the C$1.4000 level, which represents the 2004 high. Given that we are continuously seeing the creation of these long-term highs, it is clear that resistance levels are hard to come by.

However, with $1.4000 a clear hurdle, it seems sufficient to use it as a signal, where a close back above this level would lead to a continuation of this uptrend in play.

Thus with consolidation clearly dominating, it seems sensible to simply await a break higher for a bullish signal towards $1.4164 resistance.

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