Investing.com – The EUR/USD pair continues to weaken Tuesday, with new lows at 1.1193, his first foray under the psychological threshold of 1.12 since 19 June.
Since last Friday, the dominant theme in the fundamental factors is the fact that the certainty of the market see the Fed lower its interest rate to the end of the month, has been shaken by the strong report NFP on employment US for the month of June, which revealed 224k new jobs, against 160k expected.
This added a sense of closure (although relative) relations China-USA, as well as a few other statistics to US recent higher than expected has prompted investors to ask whether they actually have reason to perceive a probability of 100% that the Fed lowers its rate to 0.25% at the end of the month.
In this context, we can see the Dollar strengthen on Tuesday, but caution is still in order, before the day of tomorrow which could be crucial for the Dollar.
The chairman of the Fed Jerome Powell will testify in front of Congress the US, and the Minutes of the Fed is also expected.
If the recent news has actually called into question the possibility of a rate cut from the Fed, these events should be emphasized, and in this case, it will be necessary to expect a rebound well over franc the Dollar, and a continuation of the fall of the EUR/USD.
For the moment, we can consider that the possibilities of a resumption of the increase will remain open as long as the pair does not fall back under the support of 1.1180. Under this threshold, 1.1150 and then the hollow’s annual 1.1106 would be in the game.
Finally, it should be noted that the downward pressure is actually alleviated, the pair EUR/USD will have to reach back above the psychological level 1.13.