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

The dollar weakness story appears to be coming back into play, with AUD/USD, GBP/USD and EUR/USD all strengthening as we start the week.

EUR notes
Source: Bloomberg

EUR/USD uptrend expected to resume

EUR/USD has managed to break out of a bullish wedge pattern, following a move back into the crucial $1.1715 support level. The subsequent rally through $1.1824 points towards an end to the weakness seen over the past week.

As such, while we are seeing the pair selling off this morning, it is likely that this will be a fleeting period of weakness. Watch out for potential support from the Fibonacci support levels, where a deeper retracement is seen as a good buying opportunity. A bullish view holds unless we break below $1.1748.

GBP/USD pullback could be short term

GBP/USD is moving lower this morning, coming off the back of a bullish triangle breakout on Friday. Crucially we saw that strength run into the 76.4% retracement once more.

As such, while we have a bullish triangle breakout in play, the pair still remains within a downtrend until we break up through $1.3054. As such, the outlook comes from a break below $1.2937, or above $1.3054.

AUD/USD pulling back after bullish breakout

AUD/USD managed to break out of a downward channel on Friday, following a sell-off into historical support. While we are seeing the pair move lower this morning, it is likely to be fleeting, with the break through $0.7911 pointing towards a likely move higher before long.

As such, longs around the $0.7858-$0.7869 Fibonacci zone are preferred, with a bearish view taken unless we see the price break back below $0.7839.

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