The dollar remains supported and holds near recent highs at the beginning of the week, with focus shifting towards Fed. Positive numbers of US economic data released in recent weeks have revived speculation that the US central bank may raise interest rates by the end of the year.
The greenback edged higher against most of majors in early Monday’s trading, supported by renewed risk-on sentiment on solid number of US data and fading fallout from Brexit.

Te euro holds below 1.1000 handle against the dollar, which was again broken in late Friday’s trading, while Japanese yen turned again in defensive mode, after spiking higher vs dollar last week, on expectations that the BoJ would further ease monetary policy at its 28-29 July meeting, which is one of key releases this week, along with Fed’s meeting, scheduled on 26-27 July.
Fed is widely expected to stay pat on monetary policy, with investors awaiting Fed’s statements for more hints about their further steps, as recent solid US data do not rule out possible action by the end of the year.
Sterling has recovered some ground on a bounce from dangerous 1.3070 zone against the dollar, retested on Friday’s sharp fall, after weak data signaled contraction and holds steady above 1.3100 support in early Monday’s trading.
Antipodean currencies are in mixed mode at the beginning of the week, with Aussie dollar bouncing off Friday’s fresh 3-week low at 0.7441, while Kiwi dollar remains at the back foot, following two weeks of strong fall that marks loss of around 2.2% in July. Kiwi is pressured by talks on further rate cut, as Reserve Bank of New Zealand focuses high US dollar and stubbornly low inflation.
Meeting of G20 group was the highlight of the weekend, with Brexit impact talks dominating discussions. World’s biggest economies decided to support global growth and better share the benefits of trade. Britain’s FinMin said that uncertainty about Brexit would begin to fade once the Britain sets a vision about future relationship with Europe.\
However, EU Commission President Juncker, who hit the wires in early Monday, said that there is no deadline for Brexit talks, but the UK will have no access to EU internal market if it does not comply with EU rules.
Juncker also added Turkey is in no place to become EU member any time soon.

Highlights of the day
Monday’s calendar is almost empty, with key release being German’s Ifo business climate. Index is expected to fall to 107.7 in July, from June’s 108.70 release.
Release is due at 08:00 GMT.

Important levels

EURUSD
The pair steadies below psychological 1.1000 handle, following last Friday’s strong bearish close, as well the third consecutive weekly close in red.
Persisting bearish pressure looks for retest of key, post-Brexit low at 1.0909, for extension of larger descend from May’s 1.1614 peak.
Price action is attempting below 1.0950 (weekly cloud base), eyeing 1.0937 (Fibo 61.8% of 1.0519/1.1614 rally) and 1.0909 support. Break here would open next level at 1.0820.
Session high at 1.0977 and round-figure 1.1000 barrier, mark initial resistances, ahead of 1.1040 and 1.1058 (last Fri/Thu highs).
USDJPY
The pair attacks pivotal daily cloud base support at 106.60, on fresh bullish acceleration from 105.40/55 correction lows, supported by overall bullish structure. Sustained break above cloud base would signal an end of near-term corrective phase from 104.47 and higher low formation at 105.40.
Immediate support lies at 106.00, guarding 105.76/55 and key 105.40 low.
Resistances lay at 106.70, then 107.00 and 104.47 peak, guarding daily cloud top at 107.70.

GOLD
Spot Gold remains at the back foot and approaches near-term congestion floor and key support at $1310, following last Friday’s close in red and the second consecutive weekly bearish close. Firm break below strong $1310/08 support zone would open next supports at $1305/00.
Immediate resistance lies at $1323 (session high / 5SMA), followed by $1329 (10SMA) and $1333 (last Fri/Thu highs). Upper breakpoint lies at $1338 (20 July high)., Market Analysis