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

Recent gains for EUR/USD, GBP/USD, and AUD/USD have done little to boost sentiment, with a bearish reversal looking likely to come into play from here.

GBP/USD falters at 61.8% retracement

GBP/USD has been gaining ground as markets digest the potential culmination of Brexit talks which have produced a proposal for parliament and EU member states to consider. There is undoubtedly a chance that this could be the beginning of a wider recovery if the agreement was voted through.

However, it is worthwhile noting that there is a very strong chance that it will be rejected, leaving talks in limbo. This possibility is worth considering as it could provide a substantial downward move for sterling. With that in mind, we need to see a break through $1.3167 to provide confidence that markets are willing to run with the bullish side of the story. Until then, there is a chance the sceptics among us will drive GBP/USD lower. Only upon seeing a positive resolution from the UK parliament and EU nations would it seem sensible to gain a more bullish long-term view for sterling.

EUR/USD rebound unlikely to last

EUR/USD has been gaining ground following last week’s sell-off, with the selling pressure easing somewhat. However, the wider bearish trend remains intact, and there is a strong chance that this rebound is going to falter before long.

With that in mind, watch for a potential bearish reversal in the near future, with short-term upside being viewed as a precursor to another bearish shift. This bearish view remains in play unless we see a rally above the $1.15 swing high.

AUD/USD downside likely after overnight retracement

AUD/USD managed to regain some ground following a fall below the $0.7182 swing low. That break below $0.7182 means that the upside we have been seeing is likely to be a retracement of the $0.73-$0.7164 sell-off, before we turn lower once more.

However, with price the heading towards the $0.7193 support level, that next leg lower could be upon us, with a break below there pointing towards another downturn. Only with a rally above $0.73 would the pair start to look bullish once more.

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