- The dollar is pulling back at the start of the Fed’s week.
- Equity markets rise pushing the dollar down.
- EUR/USD appreciates, remains in recent range.
The EUR/USD is rising on Monday and climbed to 1.0257, the highest level since Thursday. The pair remains in the area of daily highs, and remains in the recent range, facing resistance below 1.0280.
Monday’s advance comes amid a general decline in the dollar, and with equity markets rising. Treasury yields rise modestly.
EUR/USD rallies are expected to remain capped if they continue below 1.0280. A break of that level would put the pair on track for a comeback above 1.0300. In the opposite direction, if firming below 1.0150, negative pressures could increase favoring a drop to the next support at 1.0075.
From the ECB to the Fed
The key event ahead this week, where all the lights are pointing, is the meeting of the Federal Reserve. A hike of 75 basis points would be announced on Wednesday, which would take the rate to 2.5%, the peak of 2019. What the US central bank says about the future will be key.
The European Central Bank had its meeting last week, with the first raise in 11 years. The official of the Governing Board, Martins Kazaks, said on Monday that in September the bank should raise the rate again and this time in a “quite significant” way.
With regard to economic data, a greater than expected drop in the Germany IFO survey. The expectations index went from 85.5 to 80.3 (vs. 83 expected) and the business climate index fell to 88.6 from 92.2. In the US, the Chicago Fed national activity index and the Dallas Fed manufacturing survey will be released.
Technical levels
Source: Fx Street
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