Last Friday, the main currency pair EUR/USD hit a one-month low of $1.0955 as investors are rushing to U.S assets, where bond yields are higher and the economic prospects look better.
This morning, the pair trades near the level of 1.0966 by losing 0.1%.
"At the moment, U.S. markets are attracting global funds. Globally there remain risks, such as European financial institutions or the Chinese yuan," said Koichi Yoshikawa, executive director of finance at Standard Chartered Bank in Tokyo.
As Reuters reports,”The strength of U.S. economic data in recent weeks has revived speculation that the Federal Reserve may raise interest rates around the end of year.
Though the Fed is expected to keep policy unchanged at a two-day meeting starting on Tuesday, investors will be parsing its statement for clues on policy direction.”
The resistance levels for the Euro are 1.0980 and 1.1023
The support levels for the EUR/USD are following 1.0950 and 1.0908
On Monday, 25th of July the Australian dollar trades on positive area. Currently, the AUD/USD pair trades near the level of 0.7477 by adding 0.3%.
“However, the pair lost over 1.5% last week as swaps traders boosted bets on easing by the Reserve Bank of Australia and tightening from the Federal Reserve”, Bloomberg writes.
“There is a risk that the RBA will have to cut rates even further. That will further erode the Australian dollar’s value, particularly if the Fed hikes rates at the same time”, said Wayne Gordon executive director for commodities and foreign exchange of UBS Group.
As Bloomberg notes, “The Swiss bank predicts the Australian dollar will slump almost 10 % to 68 U.S. cents in 12 months. Analysts expect the currency to weaken to 71 cents by year-end, according to their median estimate, from 74.76 cents as of 10:23 a.m. in Sydney Monday.
The Aussie is set to slide as prices of iron ore, Australia’s largest export, will likely retreat to below $50 by December, after gaining almost 30 % this year to about $56, said UBS’s Gordon. Slowing fixed-asset investments in China signal a cooling housing market, damping demand for Australia’s commodities, he said.”
The resistance levels for the Australian dollar are 0.7485 and 0.7515
The support levels for the AUD/USD are following 0.7468 and 0.7440.