Important events today:

14:00 UTC – US: ISM manufacturing index.

US: Treasury Department Auctions.

U.S. inflation continues to gradually decline, but the futures market is still waiting for a 0.25% Fed interest rate hike at the end of July meeting. The Fed’s favorite indicator, the Core PCE Price Index, declined 0.1 p.p. to 4.6% in May.

Thus, the Fed’s rate is now 0.65% higher than that indicator and apparently Jerome Powell believes that it is necessary to implement the Taylor rule and raise the rate by 1% higher in order to level out the inflationary threat to the economy. Today the U.S. Treasury will hold the next auctions on short-term government bond placements, which will reduce the liquidity in the financial system and support the dollar. Against this background it is reasonable to use the growth of prices towards the nearest resistance levels to open Sell positions, expecting that the downtrend will continue.

Recommendations: Sell 1.0931/1.0955 and TP 1.0834.