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

The dollar is in the driving seat this morning, with overnight rebounds for EUR/USD and AUD/USD in particular being sold into.

EUR/USD tumbles following deep retracement

EUR/USD is selling off after an overnight rally which took us into the 76.4% retracement.

This deep retracement allows for better risk-to-reward trade entries. We are now seeing the pair push back towards yesterday’s lows, with the trend looking set to resume once more. Therefore look for a break below $1.1530 as a trend continuation signal, where rebounds are there to be sold into. A break above $1.1627 is required to negate this bearish outlook.

GBP/USD turning towards key support level once more

GBP/USD is breaking lower from trendline resistance this morning, following on from a period of downside since Thursday.

There is a strong possibility that we are on the cusp of a bearish breakdown for the pair, and traders need to keep a close eye out for a potential break below $1.2800 support. Should such a break occur, then this would point towards the pair moving into a more reliable downtrend for the medium term; negating the gains seen throughout the past three weeks.

AUD/USD rebound fails to hold

AUD/USD managed to rebound overnight, following an impressive set of gross domestic product (GDP) numbers.

However, the trend is clearly defined here, and we immediately saw the pair turn lower from the 76.4% retracement. With the price breaking below the $0.7157 level, this would have been a successful selling opportunity at the Fibonacci. From here, we are likely to continue downwards, with a bearish short-term outlook remaining in play as long as we do not break above the overnight high of $0.7127.

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