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

Dollar losses have seen GBP/USD and AUD/USD gain. However, with trendline resistance coming into play for both, there is a heightened chance of a pullback in the near term.

EUR/GBP turning lower after rebound into trendline

EUR/GBP remains within a falling wedge formation, with the recent bounce fading after a move towards trendline resistance. With the 76.4% Fibonacci support down below, the ability to hold up around that £0.8697 level will be crucial. A break above £0.8728 would be the signal to say that the pair is going to break higher from this wedge.

For the wider downtrend to come back into play we would need to break below £0.8667, which would also necessitate a break of £0.8689. That level is a crucial historical low, which should be watched as a potential roadblock to any further downside. As such, watch for a break of either £0.9728 or £0.8667 to dictate the market direction from here.

GBP/USD rallies into trendline resistance

GBP/USD has continued its ascent following a bullish wedge breakout on Friday. The pair looks bullish on a wider timeframe, yet we will need to see a break through $1.4244 to provide a signal that the weakness evident throughout February is the end of the story.

For now, the pair has a descending trendline to contend with, heightening the chances of a retracement following recent gains. With that in mind, it makes sense to await a rally through trendline resistance and the $1.4244 level to bring about a bullish continuation signal. Until then, there is a risk of a short-term pullback from here.

AUD/USD could weaken after recent gains

AUD/USD has been gaining ground of late, with the move higher from the 76.4% retracement bringing us back in towards trendline resistance.

With both the stochastic prices trading near respective trendlines of resistance, there is a good chance we will see more selling come into play as the day progresses. Ultimately, we will need to see a break back above $0.7916 to provide confirmation of a bullish break following the recent 76.4% retracement.

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