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

The dollar comes under pressure this week, with EUR/USD, GBP/USD and AUD/USD all breaking higher. With those markets taking a breather, the recent uptrend could come back into play once more.

Pound and euro notes
Source: Bloomberg

EUR/USD retracing after strong rally

EUR/USD is pulling back following yet another leg higher yesterday in the pair. The recent rally has been slowing somewhat, still until we break back below $1.1388, another leg higher looks the likeliest outcome from here.

 As such, a move into the Fibonacci support levels looks like a buying opportunity. Of particular note are the 61.8% ($1.1410) and 76.4% ($1.1401) levels.

GBP/USD break marks notable shift

GBP/USD has enjoyed an incredible week, thanks in no small part to a hawkish shift from the Bank of England (BoE). This has brought price through the key $1.2978 resistance level, thus ruling out the possibility that the rally was simply a retracement.

As such, it looks as though we could see another leg higher for this market through the next resistance level of $1.3048. However, for now, the difficulty is in finding how to create a trade within such a straight line market. Given the lack of recent swing lows, it makes sense to await a break back through $1.3030 to then look for longs, utilising the most recent swing low for stops.

AUD/USD rallies into trendline resistance

AUD/USD has broken higher following a 76.4% retracement, with the price pushing into a key long-term descending trendline. Given the respect of that trendline, there is a chance of a pullback from here.

However, we would need to see a break below $0.7654 to provide confidence that such a move will be a stronger retracement of the wider rally from $0.7577. Therefore, there is a case for longs around the 76.4% retracement level of $0.7667.

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