EUR/USD currently stands only slightly above the levels traded at the start of the year. Economists at Rabobank expect the 1.06 level to offer psychological support.Scope for the USD to remain well supported into the middle of the year
“In terms of USD sentiment, February has clearly offered something of a sea-change relative to last month. It is our expectation that this has further to run.”
“Given our expectation that the FOMC is likely to take the top of the target range for the Fed Funds to 5.5%, we see scope for the USD to remain well supported into the middle of the year.”
“1.06 can be expected to offer psychological support. Below this the year’s low at 1.0484 is likely to offer strong support.”
EUR/USD struggles to hold above 1.0700
Following the rebound witnessed in the Asian session, EUR/USD lost its traction and retreated below 1.0700. The cautious market mood amid escalating geopolitical tensions help the US Dollar hold its ground. US markets will be closed in observance of Presidents’ Day on Monday.
GBP/USD continues to fluctuate above 1.2000
GBP/USD is having a difficult time making a decisive move in either direction and fluctuates above 1.2000 on Monday. Trading conditions are expected to remain thin in the second half of the day with the American investors enjoying a long weekend.
Gold recovers further from YTD low, upside potential seems limited
Gold price is trading around a flatline at the start of the week on Monday, consolidating Friday’s sharp rebound from seven-week lows of $1,819. Markets remain cautious amid the renewed geopolitical risks while awaiting the Minutes of the US Fed February meeting due later this week.
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