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

Sterling stumbles, as polls point towards a potential hung parliament, while dollar strength for EUR/USD and USD/CAD pairs seems likely. 

Canadian and US dollars
Source: Bloomberg

EUR/USD tests trendline resistance

EUR/USD has managed to rally into trendline resistance at the start of the week, with the recent descending channel coming into question once more.

Given the wider uptrend in play, the bullish breakout signal we are looking for is an hourly close above $1.1205. Until then, the channel remains in play and thus we could start to see the pair come off somewhat. An hourly close below $1.165 would point towards a move into the lower end of the channel ($1.1114).

GBP/USD falls on election uncertainty

The GBP/USD strength of April and May seems to be on the wane, as polls point towards a far from secure election ahead in the UK.

The pair has been attempting to regain ground after bottoming out on Friday, yet the downtrend seems likely to return, with an hourly close below $1.2775 and $1.2756 pointing towards further downside. Should that come to fruition, we will be looking at the Fibonacci levels for support, with the 50% ($1.2707), 61.8% ($1.2626) and 76.4% ($1.2527) in view.

USD/CAD to rebound from trendline?

USD/CAD has begun to reverse higher from trendline support this week, following a period of weakness for the pair. For now we are in a discovery phase, with bullish confirmation coming an hourly close above $1.3506. That would necessitate a break through both trendline and simple moving average (SMA) resistance, thus providing greater confidence of a bullish reversal.

Until then, the downtrend remains in play, and thus any further downside would bring trendline support into play once more.

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