Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. Before deciding to trade foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. You could sustain a loss of some or all of your initial investment and should not invest money that you cannot afford to lose. CFDs are complex instruments. You can lose your money rapidly due to leverage. Please ensure you understand how this product works and whether you can afford to take the high risk of losing money.

Dollar strength bears down on EUR/USD, GBP/USD and AUD/USD

A continued rise in the greenback has seen further modest losses for EUR/USD, GBP/USD and AUD/USD.

EUR/USD begins new week with declines

The EUR/USD continues its retreat from the highs seen last week, although for now the losses are small compared to the gains since early October.

Further declines below the $1.213 level are likely to see this pullback gather pace, targeting the rising 50-day simple moving average (SMA) at $1.2033. The short-term upward move of December appears to be over, but the longer-term rally is still very much in place.

GBP/USD hits one-week low

Here too the price of GBP/USD has broken below short-term support, and further declines below $1.347 are likely to reinforce the negative view for the time being.

Again, however, the longer-term uptrend is intact, with previous weakness in December finding support at the 50-day SMA ($1.3357). A move back above $1.357 provides evidence that the buyers have once again taken control.

AUD/USD continues short-term weakness

A resurgent US dollar is making itself felt here as well, with the AUD/USD seeing its most substantial decline for weeks.

A continued move lower targets the $0.75 region, where a bounce materialised in mid-December, and then close behind this is the rising 50-day SMA at $0.7444. A move back above $0.775 could restore the advantage to the buyers.

This information has been prepared by IG, a trading name of IG US LLC. This material does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. You should not treat any opinion expressed in this material as a specific inducement to make any investment or follow any strategy, but only as an expression of opinion. This material does not consider your investment objectives, financial situation or needs and is not intended as recommendations appropriate for you. No representation or warranty is given as to the accuracy or completeness of the above information. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. Any research provided should be considered as promotional and was prepared in accordance with CFTC 1.71 and designed to promote the independence of investment research. See our Summary Conflicts Policy, available on our website.

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