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

Potential losses for the dollar come into question with EUR/USD expected to turn higher, while GBP/USD and NZD/USD gain ground to challenge some key resistance levels.

Pound sterling and US dollar
Source: Bloomberg

EUR/USD to head higher following pullback

EUR/USD regained some ground overnight, within a pullback that has been in play since Monday’s top. Given the consistent creation of higher highs and higher lows since bottoming out in late February, it looks as if this short-term weakness would provide another leg higher for the pair.

Currently, the 61.8% retracement represents the low for now, yet any move into the 76.4% retracement would present an even better area for longs. In either case, a move higher is expected soon to continue the trend with a move above $1.0714. Beware of the FOMC volatility though.

GBP/USD rallies into key resistance

GBP/USD has managed to gain ground this morning, following a new low yesterday. The move below the 76.4% retracement shows the deep pullback we have been seeing, but with the price rallying into the $1.2251 resistance, there is a chance we could see a recovery coming into play.

An hourly close above $1.2251 would mark the beginning of a bullish reversal sign. However, until that happens we still have lower lows and flat lining tops, highlighting the potential for further downside.

NZD/USD returning to crucial resistance level

NZD/USD has had an incredible downtrend of late, with the pair tumbling from the beginning of the year. Now we are seeing a potential new higher high, which would be the first for a month.

With that in mind, the $0.6952 resistance level is going to be crucial today as a precursor for the future price action. A close above that level would look to pose questions over the longevity of the current downtrend. But, should that level hold up, it could be the source of the next move lower.

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