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

Dollar weakness looks likely for upward trending markets like EUR/USD and AUDU/SD. Yet, with Brexit negotiations beginning this week, GBP/USD is likely to come under further pressure.

Euro and pound coins
Source: Bloomberg

EUR/USD awaits the next big break

EUR/USD continues to consolidate, following the move lower into the 76.4% Fibonacci retracement. Since then, we have been seeing a falling wedge in play, which is typically bullish.

This morning we are seeing the price breaking higher, as it attempts to create a new higher high following the overnight higher low. Thus, a break and hourly close above $1.1178 would be a bullish short-term view. Ultimately, we are looking at a wider bullish trend, and until the price breaks below $1.1109, there is a good chance that we will see the pair turn higher once more. 

GBP/USD rally gives chance of shorts

GBP/USD has been rallying towards the 76.4% retracement this morning, following a sharp sell-off back in the first half of the week. This provides us with the potential for a new selling opportunity at a better price.

The clear bearish trend in play here over the past month provides confidence that this rally is going to be short-lived, with a break through $1.2818 required to negate the bearish outlook. 

AUD/USD punches higher after pullback

AUD/USD is spiking higher in early trade today, coming off the back of a deep retracement into the 76.4% Fibonacci level at $0.7546. Given the uptrend evident over the past month, there is reason to believe that we will see further gains as we continue to create higher highs and higher lows.

As long as we do not break back below $0.7519, further upside looks likely.

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