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

After Donald Trump dumped the dollar, many of the recent trends have come under pressure, with EUR/USD and GBP/USD breaking key resistance levels. However, most notably, USD/CAD seems to have broken out of an eight-month uptrend.

Euro and US dollar notes
Source: Bloomberg

EUR/USD rebounds into key resistance

Yesterday’s speech from Trump didn’t do us any favours from a technical view, negating much of the rebound we had seen for the dollar. In the case of EUR/USD, we can see that yesterday’s rebound counteracted the break below $1.0511, with price reaching a new 2017-high.

Crucially we are approaching the key $1.0655 resistance level, which has a good chance of holding. As such, it will be worth watching this level as a source of either breakout (an hourly close above $1.0655) or short-term reversal. In the case of a reversal, watch for shorter intraday reversal patterns and candles.

GBP/USD smashes through resistance

GBP/USD also benefitted massively from Trump’s speech, with the pair breaking back through $1.2200 resistance and rallying into the 61.8% retracement ($1.2282). This certainly was not our ideal outcome, yet it shows the risks associated with any Trump speech.

What we are currently seeing looks like a retracement of the pullback from $1.2433 and as such, shorts from around $1.2340 would look attractive. There is a chance we could see this turn lower in the near-term, but we have not seen anything yet to say that is about to happen.

The long-term trend is certainly bearish and perhaps it is a case of waiting for this storm to blow over. A break above $1.2433 would be a major warning sign that we could see a wider resurgence in the pound.

USD/CAD breaks through critical support zone

USD/CAD has suffered at the hands of Trump, breaking below a major support zone. Not only have we seen a break through trendline support, but more importantly, the move below C$1.30871 completes a double top and the confirmation came with a push below the major historical C$1.3064 level (March 2009 high).

As such, it looks like we will see further downside, with the continued creation of intraday lower highs and lower lows key to this downtrend continuing.

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