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

EUR/USD and GBP/USD show signs of potential strength. However, with EUR/USD continuing to hit key resistance, could we be set for a bullish breakout?

EUR/USD tumbles from horizontal resistance

EUR/USD has been losing ground from the crucial $1.1744 level yet again this week, with the pair breaking through trendline resistance in the process. Given the continued attempts to break through that level, there seems to be a growing chance that we will see a rally out of this period of consolidation.

With that in mind, the current pullback looks like a retracement of the $1.1620-$1.1746 rally. As such, look for potential long positions from the 61.8% and 76.4% retracement levels. A break below $1.1620 negates the triangle formation, but also negates the expectation of a bullish push back into $1.1744.

GBP/USD respects trendline support ahead of BoE

GBP/USD has been consolidating ahead of the Bank of England (BoE) meeting, with the price respecting trendline support yesterday. The wider downtrend points towards further losses, yet it is worthwhile waiting for a break below $1.3083 to kick off another leg lower.

Until then, the pair appears to be trading within a symmetrical triangle formation, with a potential rebound into trendline resistance over the short term.

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