- The Euro bounces up with market sentiment improving.
- Fears of escalation in the Middle East conflict have eased.
- EUR/USD maintains its bullish trend intact while above 1.1500.
The EUR/USD pair is trading with moderate advances on Monday, extending its recovery after Friday’s reversal, following Israel’s attack on Iran. The pair has returned to levels close to 1.1560 from Friday’s lows at 1.1490 as the market gauges the impact of the Middle East conflict.
Israel and Iran have continued shelling each other over the weekend. Still, so far, the tensions have not spread throughout the region and Iran has not threatened to block the Strait of Hormuz, a strategic path for Oil traffic and whose closure could draw the US into the conflict.
Investors are also looking at the Federal Reserve (Fed), which will decide its monetary policy on Wednesday. Interest rates are unlikely to change, but the soft data seen recently might prompt the central bank to show a dovish shift in the tone of its statement, laying the ground for a rate cut in September.
The US Dollar (USD), which rallied on Friday, favoured by investors’ rush for safety, is losing ground again., Tariff uncertainty and the lack of progress on deals between the US administration and its trading partners are resurfacing, weighing on the Greenback, with the clock ticking closer to the July 9 deadline.
If that is the case, we could see the US Dollar resuming its longer-term bearish trend in the second half of the week.
Free Forex Signals 
Leave a comment