FX levels to watch: EUR/GBP, GBP/USD and NZD/USD

The dollar is in control, with GBP/USD and NZD/USD selling off sharply. Meanwhile, EUR/GBP looks set to continue upwards over the medium term.

EUR/GBP trading at channel resistance

EUR/GBP has managed to maintain its channel well this week, with the recent rally bringing us back into the upper echelons of the channel. This points towards a potential retracement before long.

However, we have not seen any signs of such a move yet and it is therefore very possible that we could see the price break from this formation. Any pullback from here would simply look like a retracement before we push higher once more, with a break below £0.8797 required to negate the current uptrend.

GBP/USD tumbles after double top completion

GBP/USD has been declining heavily since breaking the double top neckline, with yesterday’s rally back into that neckline proving a strong selling opportunity. For now, there is a chance that we will retrace upwards before long given the strength of yesterday’s downturn.

Should that occur, it would look like a selling opportunity as long as the price does not break through $1.2922. There is a strong chance of a short-term rebound soon, given the way that the stochastic is coiling into the apex of a descending triangle while the price trades near the key $1.2785 swing low.

NZD/USD expected to keep falling after recent decline

NZD/USD managed to post a 61.8% retracement yesterday, coming off the back of a double top formation, sending the pair sharply lower.

The wider downtrend pointed towards the rally seen earlier in the month, providing a retracement that ultimately topped off at the 61.8% level. Now that we have resolved that retracement, we are likely to sell off into the $0.6424 swing low to continue the downtrend that has been in play over the past six months.

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