FX levels to watch: EUR/USD and AUD/USD

The EUR/USD pullback looks to be setting it up for another bullish push, while AUD/USD is doing the opposite as the short-term upside looks set to provide a bearish shift.

EUR/USD pullback a likely precursor to bullish rebound

EUR/USD has been drifting lower since rising through the key $1.1442 and $1.1472 swing highs.

Given the break through those levels, it is likely that the current move lower is a retracement before we turn higher once more. As such, a bullish outlook is in play unless we see a fall below $1.1270.

AUD/USD back in retracement mode

AUD/USD has been declining throughout December, negating much of the upside seen in October and November.

Given the recent trend of lower highs and lower lows, this looks likely to provide a short-term reprieve before the sellers come back in again. As such, while further upside looks likely in the short term, a bearish wider picture remains unless the pair rallies through the $0.7203 swing high.

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