The US dollar is making a strong recovery in today’s trading session after suffering heavy losses against Euro on Friday as investors flock to the safety of US treasury yields over fears of another Covid 19 outbreak.
The Delta variant of the coronavirus is beginning to spread like wildfire in countries such as Spain and the United Kingdom while cases in the US are also skyrocketing. The UK is set to do away with all restrictions surrounding the coronavirus on July 19 which some say is premature and possibly a recipe for disaster.
Today, with no major news to hit the market we may see a somewhat subdued trading day as investors sit on the sidelines and wait for tomorrow’s inflation figures from the US which will shed some light on whether the US Federal Reserve will need to begin reducing their bond buying program and lift interest rates.
Also this week Fed Chair Jerome Powell will give a testimony to US congress on the state of the US economy and the Central bank’s plans moving forward and if the tone is as bullish as last weeks minutes release, the US dollar is likely to remain well supported.
Last Friday the Euro was able to break a significant resistance level at $1.1861 and so far in today’s trading session it is acting as a support level which began almost a month ago on June 18.
The $1.1878 level from Friday was the high of the day and already today has acted as a strong resistance level which may be difficult to overcome, at least until the release of the CPI figures from the US tomorrow.