CFDs are a leveraged product and can result in losses that exceed deposits. Please ensure you fully understand how CFDs work and what their risks are, and take care to manage your exposure. CFDs are a leveraged product and can result in losses that exceed deposits. Please ensure you fully understand how CFDs work and what their risks are, and take care to manage your exposure.

EUR/USD and AUD/USD bottoming out, while GBP/USD hit by political developments

The euro has reached vital support, after steady losses in recent days, while AUD/USD is also looking to rebound. Meanwhile, sterling traders brace for the arrival of a new PM.

EUR/USD hits crucial support zone

EUR/USD finds itself in a vital zone of support, one that has held since mid-June. If the price can hold around $1.12, taking advantage of intraday oversold conditions, then a rebound towards trendline resistance at $1.125 may come into play.

The price needs to clear previous lower highs at $1.128, $1.13 and $1.132, however, to suggest a firm breakout is in play. A move through the $1.12 support zone and below $1.118 would reinforce the prevailing bearish view and bring the May low at $1.112 into view.

GBP/USD under pressure

While a new UK prime minister (PM) is appointed today, much of the news and speculation about a ‘no deal’ is already in the price for GBP/USD. Thus, the price may be able to rally in the short term.

Friday’s peak has created a new lower high, but the price has managed to stabilise around $1.245. A bounce from here would target $1.255, while further declines head back to $1.24. The prevailing trend is still lower, but if the price can establish a higher low then we may see some bullish pressure develop.

AUD/USD attempts to bottom out

A steady decline from yesterday’s high begins to suggest that the AUD/USD price is losing momentum, but oversold conditions might provide a bounce that saves the longer-term rally seen over the past month.

A recovery above $0.705 would provide a more bullish view and target $0.708, the highs from last week. A move below $0.70 is needed to cement a bearish view in the short term, to open the way to $0.697 and then $0.691.

This information has been prepared by IG, a trading name of IG Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
CFDs are a leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your initial deposit, so please ensure that you fully understand the risks involved.

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