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CFDs are complex financial instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money. CFDs are complex financial instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.

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

Strength for the US dollar appears to be pushing the likes of EUR/USD, GBP/USD and NZD/USD lower. However, whole NZD/USD and GBP/USD look bearish, we could yet see a resurgence from EUR/USD.

Dollar notes
Source: Bloomberg

EUR/USD weakening from key resistance

EUR/USD is moving lower from the crucial $1.1824 resistance level. Above this we have a clear bullish signal following a wedge breakout.

However, for now we are seeing some hesitancy, which is likely to resolve with a move higher before long. As such, a bullish outlook is preferred unless we see a break back below $1.1740.

EUR/USD chart

GBP/USD breaks key support level

GBP/USD managed to break below the notable $1.2811 support level yesterday, pointing towards a continuation of the recent weakness. Over the short term, we have a clear descending channel, with a break above $1.2807 required to point towards a bounce into the $1.2860 region.

Until then, we could see further short-term downside to come.

GBP/USD chart

NZD/USD breakdown looks likely to persist

NZD/USD has been selling off sharply since breaking lower from an ascending triangle formation. The initial bearish signal of a break below $0.7305 was solidified by a move below $0.7276, giving way to rapid devaluation of the pair. Crucially while we have seen a move back below the notable $0.7223 support level, it is the $0.7202 mark which has the biggest implications. That level marks the neckline of a two-month head and shoulders formation.

As such, a continuation of the price action below $0.7202 points towards a strong move lower for this pair. Watch out for follow through from this level to point towards a period of downside for NZD/USD. If that doesn’t occur, there is a chance of a rebound given the importance of this level.

NZD/USD chart

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