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

The euro and sterling continue to decline, as dollar strength continues into a new week.

EUR/USD continues to decline after bearish week

EUR/USD has been turning lower over the course of the past week, with the pair moving towards a key support level.

The wider bearish picture remains in play and the failure to break through the $1.1265 peak highlighted the strong possibility of another breakdown from here. A drop below $1.1135 would signal a likely move towards the $1.1112 lows. However, until that happens there is a chance that we rebound to continue the higher lows in play over recent weeks.

GBP/USD drops below key support level

GBP/USD has seen sharp declines over the past week, with the pair falling below a key support level at $1.2773. That swing low from February was key in maintaining the uptrend that has been in place throughout the start of 2019.

However, with the price having broken below that key support level, we are faced with a heightened chance of a wider bearish breakdown for the pair. The pair is moving higher this morning, yet we would need to see a rise through $1.28 to signal a longer lasting retracement coming into play.

USD/CAD decline looks unlikely to last

USD/CAD has been in consolidation mode over the course of May thus far.

The pair is declining as we start this new week, yet a look at the price action over the course of 2019 points towards a wider bullish trend in place. Thus, we are expected to break higher from this sideways consolidation phase, highlighting the strong buying opportunity that is in place from these levels. With that in mind, a bullish outlook is in place, with the pair expected to reverse upwards between here and the $1.338 lows. Should we see further downside, the confluence of the 200-simple moving average (SMA) and potential trendline looks like an interesting area for buyers.

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