FX levels to watch: EUR/USD, GBP/USD and AUD/USD
EUR/USD, GBP/USD and AUD/USD have all managed to rally towards notable resistance levels. Could we be due a shift lower for these currencies in the short term?
EUR/USD expected to drift lower amid consolidation
EUR/USD has been trading within a descending channel formation over the past week, with the price looking like it is in a drawn out retracement of the $1.1275-$1.1371 rally.
This points towards a likely break higher before long, yet with the price currently forming a bearish engulfing pattern around trendline resistance, there is a good chance we could see short-term downside. Interestingly, the break through Friday’s high of $1.1356 points towards the bullish surge coming in play before long, and thus any short-term downside could be a precursor to a bullish surge out of this consolidation.
GBP/USD back into resistance zone
GBP/USD has managed to rally into a zone of resistance which capped last week’s price action. This is a key hurdle which needs to be overcome to bring about the next leg higher for the pair.
Thus, the ability or inability to break through the $1.3109 resistance level is going to be key in determining whether this market is going to break higher or fall back once more.
AUD/USD rallies after Trump comments
AUD/USD enjoyed a bullish end to the week, and with the US President Donald Trump removing the Friday 1 March deadline for the imposition of heightened tariffs on the Chinese, we are seeing a positive start to this new week.
However, questions remain when looking at the chart, with the breakdown below $0.7103 providing a signal that we could be due another leg lower. That break portrays the current rally as a retracement, with a break through $0.7207 required to negate that bearish view. As such, watch for a potential bearish turn, with the $0.7174 Fibonacci resistance level of particular importance. A break through that level starts to weaken the bearish story, whereas respect of it points towards a possible impending period of weakness.
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