EUR/USD joins NZD/USD in breaking through key resistance level
Dollar weakness sees particularly notable gains for EUR/USD and NZD/USD. Both have broken through crucial resistance levels to bring about a bullish wider outlook.
EUR/USD breaks through crucial resistance level
EUR/USD saw an impressive start to the week yesterday, with the pair rallying sharply to push through the critical $1.1263 resistance level.
That resistance level marks the swing high, which, now broken, provides us with just the second higher high of 2019 (on the daily timeframe). This highlights the now substantial possibility that we are bottoming out here, and unless we see a break back to $1.1116, then further upside looks likely.
GBP/USD rally likely to fade
GBP/USD has been gaining ground gradually over the beginning of the week, with the pair moving into the zone between the 61.8% and 76.4% Fibonacci retracements.
That looks to pave the way for another move lower before long, with continued uncertainty surrounding the political and economic picture of the UK denting confidence. We see the construction purchasing managers index (PMI) released today, which will be key after yesterday’s sharp declines in manufacturing. As such, keep an eye out for another move lower, where a rally through $1.2748 would be required to negate this current bearish outlook.
NZD/USD bottoms out, with further upside expected
NZD/USD managed to break through the $0.6559 swing high yesterday, following up from the break through trendline resistance.
This looks to have set a bottom for the time being, with further upside looking likely from here. With some weakness looking like a potential over the short term, any such downside would need to break below $0.6495 to bring the bearish trend back into play. Until then, any weakness would simply look like a precursor to a bullish setup.
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