FX levels to watch: EUR/USD, GBP/USD and USD/CAD
A mixed affair on the FX front has seen EUR/USD weakness, set off against USD/CAD and GBP/USD strength. However, could these moves provide a reversal opportunity?
EUR/USD consolidating at Fibonacci support
EUR/USD pulled back into the 76.4% retracement last week, with the price continuing to consolidate around that key support level.
The ability to remain above that level is going to be crucial in determining where we go from here, for if we break below this $1.1456 support, it would point towards a potential break into $1.1422. Should we fall below that level, it would look like we are retracing the wider rally from $1.1301. However, until that happens there is a good chance we are seeing a retracement of this short-term $1.1422-$1.1570 rally. With that in mind, we are likely to see this pair turn higher from here as long as it holds up above the 76.4% retracement.
GBP/USD turning lower after recent rally
GBP/USD rallied sharply at the end of the week, coming off the back of a stronger than expected UK gross domestic product (GDP) reading for November. That has taken us through the $1.2812 resistance level, pointing towards a potential period of upside from here.
However, with the pair turning lower, we could be set for short-term losses as we head towards tomorrow's parliamentary vote. A break below $1.2706 would signify a more bearish shift, yet for now it makes sense to simply look for a short-term retracement rather than guess the outcome of a highly unpredictable series of events that are due to play out this week.
USD/CAD rebound could point to bullish reversal
USD/CAD managed to break out of its recent downtrend, with the price breaking through the crucial swing high of $1.326. That points towards a possible bullish reversal from here, with the next sell-off providing a higher low.
With trendline support currently in play, a break below here would bring about such a retracement. As such, a bullish outlook is in play, with a break below $1.3183 required to provide a bearish continuation signal.
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