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

The dollar is under pressure following recent gains for EUR/USD and GBP/USD, while USD/CAD has dropped sharply lower. However, with key swing highs yet to be broken, there is still a good chance the dollar will see a resurgence in the near future.

EUR/USD breaks through trendline resistance

EUR/USD has been pushing higher throughout recent days, with the price breaking above a key resistance zone between the middle Bollinger band and a descending trendline.

This could pave the way for a more bullish short-term trend, given the fact that this period of upside is coming from the critical $1.1554 support level, below which we would see a long-term downtrend (since 2008) come into play. However, we need to see the price break above the first swing high of $1.1750 to provide confirmation of a more bullish short-term view. Until then, watch for potential resistance to come into play at the upper Bollinger band.

GBP/USD rallies into resistance

GBP/USD has also managed to regain ground significantly, pushing through a steep trendline of resistance to arrive at a somewhat shallower trendline.

Thus far we have seen that trendline respected, and with the upper Bollinger band above, there is still a good chance that we will see this market turn lower once more, to follow the wider downtrend in play. A break and hourly close above the $1.3341 and upper Bollinger band would bring about a more bullish short-term view. Until then, the downtrend still remains intact.

USD/CAD breaks lower in likely retracement

USD/CAD managed to break lower yesterday following a trendline break, and the eventual bullish CAD effects of strengthening crude prices and a relatively hawkish tone from the Bank of Canada (BoC).

With a wider uptrend in play over the past nine months, there is a strong chance that this current pullback is simply a retracement before we move higher once more. However beyond the past nine months, the pair has been trending lower since the $1.4690 peak back in early 2016. As such, a break below $1.2743 would heighten the chances that this is the beginning of the next major turn lower for USD/CAD. Until we see that break below $1.2742, there is a good chance that we will soon start to turn higher once more. 

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