No important events are expected today.

The growth of quotations in the area of Friday’s high (1.0970) should be used to open sell positions for two reasons. Firstly, tomorrow the US Treasury will hold $115bn treasury bond auctions and the liquidity withdrawal will have a positive effect on the US currency value. Traders will start to play this factor in advance and against this background it is reasonable to look out for EURUSD sales today. Janet Yellen’s office this month is actively placing short-term bills with maturities of 3-6 months and later will refinance these loans through long-term securities. Thus, we will see another wave of bond placements and a stronger dollar this fall.

Second, despite Friday’s statistics on inflation expectations from the Michigan Institute, the Fed Funds rate futures still signal a tightening of monetary policy at the July meeting, which is also good for the dollar. Personal inflation expectations fell 0.9pc to 3.3%, the lowest since February 2021, but Chicago futures market traders are not changing their minds and expect a 0.25pc increase in the U.S. Fed rate to 5.5% at the July 26 meeting.

Recommendation: Sell 1.0950/1.1000 and TP 1.0887.