While EUR/USD and EUR/GBP drift higher, the downtrend for the euro remains well intact and thus we are watching for the signs of this trend returning.

Dollar and pound
Source: Bloomberg

EUR/USD continues to drift higher

EUR/USD continues to drift higher this morning, in what looks a lot like a short-term retracement rather than any sort of change in the overall trend.

We have seen this happen many times before and thus the bearish view remains, with $1.0667, $1.0674 and the 50-period simple moving average (four-hour) providing potential sources for the next leg lower.

Should the selloff resume, the next major support zone comprises of the March and April lows of $1.052 and $1.0462. This bearish view holds unless price closes above $1.0708.

GBP/USD breaking lower

GBP/USD's upside seen yesterday looks to be on the wane, with a bearish engulfing possibly being created. With the close below $1.517, we are clearly trending lower and thus another leg lower seems likely.

A close below $1.5107 would be a good signal that another leg lower looks to be on the cards. Support levels to watch are at $1.5107 and $1.5026.

This bearish view holds unless price closes above $1.5178.

EUR/GBP moving higher

EUR/GBP is moving higher having broken out of a period of sideways consolidation and into a more bullish phase. The overall trend is clearly bearish, yet for now, we are seeing higher lows and highs being created which highlights the possibility of this pair to drift higher in the short-term.

Resistance at £0.7038 is an important one and thus a close above this level would give more confidence of further upside. Resistance levels to watch are at £0.7080, £0.7100 and £0.7110.

To the downside, a close below £0.7015 would bring back the bearish view, with the next support levels at £0.7000, £0.6992 and £0.6982.

NZD/USD hits key support

NZD/USD has moved higher from the key $0.6498 support level this week and is gradually moving higher. This points towards the possibility of the pair moving back to the top of this falling wedge pattern and thus a bullish view holds as long as price remains above $0.6498.

With both the MACD histogram and stochastic moving higher, the momentum indicators are supporting the bullish sentiment.

Resistance levels to watch are at $0.6550 and $0.6580. Meanwhile, a close below $0.6498 would look towards $0.6457 as the next support level.

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