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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.

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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