Dollar weakness gives EUR/USD, GBP/USD and AUD/USD a breathing space
A small reversal in the US dollar has allowed the euro, sterling and Aussie to recover some lost ground.
EUR/USD climbs back above recent low
The hopes of the sellers have been dashed for now as EUR/USD reverses from Friday’s low and stages a two-day rebound that has carried it back towards $1.19.
There is still a lot of ground to recover to put the price back on a more bullish footing, with a rally above $1.194 being a good first step. Sellers will hope that the return of US traders from their holiday can provide the spark for a fresh drop back below $1.188.
GBP/USD recovers $1.38
Having recovered back above $1.38, GBP/USD is attempting to build a more bullish view that may yet take in a rebound to $1.40.
If it can move above this latter level then the bearish view will be firmly cancelled out for the time being, and an eventual move towards $1.42 can be contemplated. Alternatively, sellers will want to see the price reverse and move back towards $1.37.
AUD/USD stages a bounce
As with the other two pairs, for now it looks like AUD/USD's bounce of the past three days has firmly cancelled out the bearish view.
Having rebounded from $0.7473 for a second time in less than a month, the price has now established a firm line that will need to be firmly broken to the downside to renew the bearish view. Buyers now need to clear the vital area around $0.76, which marked resistance in June but was support earlier in the year, in order to create the conditions for a new bigger move higher.
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