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

A mixed bag for the dollar, with EUR/USD strengthening, GBP/USD looking undecided, and AUD/USD selling off sharply.

Source: Bloomberg

EUR/USD rallies up to major resistance level

EUR/USD has largely confounded the notion of a bearish turnaround, with the price breaking through $1.1687 and towards $1.1836. The ability to break through that high will go a long way in proving that this market is going to break out of the downtrend seen in recent months.

This would also negate the bearish head and shoulders formation. As such, watch out for how the pair reacts around this area, with $1.1836 providing the pivotal area, where the ability or inability to break through it will provide the bias for the day.

GBP/USD rallying into trendline

GBP/USD has managed to regain ground following the losses earlier in the week, with the price now rallying back towards trendline resistance. This trendline only has two touches and as such may be ignored all-together.

However, with the 200 simple moving average (SMA) in play, and the stochastic overbought, there is a good chance we could see the pair turn lower before long. Ultimately, as long as the price does not break above $1.3229, then a bearish outlook remains.

AUD/USD finally turns over, with big sell-off

AUD/USD has finally sold-off in a sharp manner, with the continued creation of lower highs and lower lows forcing the price out of the recent period of consolidation. With the latest move lower, we are now looking at a possible retracement of the overnight move, with Fibonacci levels coming into play.

As such, a bearish view remains unless we move back above $0.7650, where a move into a deeper retracement would provide an improved entry for new positions.

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