The Euro (EUR) gives back a majority of its early gains against the US Dollar (USD) after failing to rise above the intraday high of 1.1418 on Monday.
During European trade, the US Dollar Index (DXY), which gauges the Greenback’s value against six major currencies, trades almost 0.2% higher to near 1.1395
The major currency pair surrenders early gains as the US Dollar (USD) bounces back after a weak start of the week. The US Dollar started lower as the pause in military aggression between the United States (US) and Iran over the weekend diminished the appeal of safe-haven assets. This week, major triggers for the pair will be the Federal Reserve’s (Fed) monetary policy announcement on Wednesday, and the release of the Eurozone Harmonized Index of Consumer Prices (HICP) data for July on Friday.
Investors expect the Fed to leave interest rates unchanged in the range of 3.50%-3.75% again and deliver no monetary policy guidance, while warning of upside inflation risks. On the Eurozone front, the inflation data will influence the European Central Bank‘s (ECB) interest rate expectations, as officials have expressed concerns regarding prolonged elevated inflationary pressures. EUR/USD technical analysis EUR/USD trades higher at around 1.1392, but is keeping a mildly bearish near-term tone as the 20-day Exponential Moving Average (EMA) at around 1.1419 continues to act as a key barrier.