• Oversold conditions were one of the main restraints on this week's drop

• That stretched situation has since been alleviated

• Over $10billion was staked on a rise last week weighing on euro

• Traders - encouraged by support ahead 1.10 holding - likely bought the dip

• Others betting on a rise may have been encouraged to hold existing longs

• Trade truce lessens need to hold safer euros which was main basis for longs

• Euro may be negatively influenced by interest rates in future

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(Jeremy Boulton is a Reuters market analyst. The views expressed are his own)