FX levels to watch: EUR/USD, GBP/USD and NZD/USD
The dollar rally is easing, with EUR/USD, GBP/USD and NZD/USD all gaining ground. However, with wider bearish pictures intact, this rebound could be relatively short-lived.
EUR/USD rallies back into trendline resistance
EUR/USD has started strengthening after last week’s declines, with the price having rallied into trendline resistance.
The break below the $1.1305 mark last week provides a bearish signal and allows greater confidence that this rally will fall short of the $1.1393 swing before breaking lower once again. Whether that bearish turn takes place from here or not remains to be seen, yet a bearish outlook is preferred unless we break the $1.1393 level.
GBP/USD regaining ground after head and shoulders breakdown
GBP/USD spent the end of last week falling after completing a head and shoulders formation. We are seeing the pair regain ground this morning, bringing about a possibility of a wider 76.4% retracement beyond the 61.8% retracement seen last week.
However, there is also a good chance that we are looking at a retracement of the sell-off seen from Thursday’s high. As such, further near-term upside looks likely, with the size of that upside determined by the ability to break $1.2687.
NZD/USD heading towards rebound confirmation level
NZD/USD is rising towards the key $0.6813 level this morning, with the resulting double bottom formation heightening the likeliness of a period of upside.
Coming off the back of a sharp deterioration last week, such a rebound could be notable without even requiring a break through the $0.6879 swing high. As such, keep an eye out for that $0.6813 level as a key determinant of market bias for the day ahead.
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