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. 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.

Dollar weakens, giving EUR/USD and AUD/USD space to rally, while EUR/GBP edges lower

A risk-on morning has seen the Aussie and euro make headway against the US dollar.

EUR/USD rebound stalls

EUR/USD dropped back from Friday’s highs yesterday, and was unable to make further progress towards $1.06. However, the bearish view has yet to be fully revived, since the gains of the past few days are still relatively intact.

For the time being, the price continues to hold above the $1.0354 level, as it did in early May, avoiding any new lower low.

Jerome Powell’s testimony this week could provide further direction, depending on his view of monetary policy. Additional upside from current levels would head towards $1.0637, $1.0727 and then $1.0777.

EUR/GBP keeps climbing

EUR/GBP has continued to climb over the past two months, as the cautious outlook from the Bank of England (BoE) contrasts with the move towards rate increases by the European Central Bank (ECB), and the expectation that the policy response will have to be stepped up.

Trendline support has continued to underpin the pair since mid April, helping to prevent additional downside several times in May and June. In addition, a series of higher highs and higher lows remains in place. The most recent spike carried the price towards 87p, the highest level since quarter one (Q1) 2021.

A break below 85.40 would likely put the price below trendline support and signal that a bigger near-term pullback is at hand. Further gains from the current level would head towards 85.95 and then 86.58.

AUD/USD looks to move higher

AUD/USD dropped sharply on Friday, and then was unable to make much headway yesterday, remaining below $0.697. Even comments from the Reserve Bank of Australia (RBA) governor overnight relating to the expectation of further rate increases was unable to provide much of a bullish impetus for the pair.

Further gains above $0.697 would put $0.7007 into view, followed on by the highs last week around $0.705. From there the 50-day simple moving average (SMA) at $0.712 comes into view.

A break below rising trendline support from last week’s low, i.e. below $0.694, would mark a bearish move and put last week’s low at $0.685 back into play as possible support.

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.

Start trading forex today

Trade the largest and most volatile financial market in the world.

  • Spreads start at just 0.8 pips on EUR/USD
  • Analyze market movements with our essential selection of charts
  • Speculate from a range of platforms, including on mobile

Live prices on the most popular forex markets

liveprices.javascriptrequired

Prices above are subject to our website terms and agreements. Prices are indicative only

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading forex provider.

Stay on top of upcoming market-moving events with our customisable economic calendar.