The course of trading will be strongly influenced by two factors. On the one hand, we can expect an increase in quotations against the background of a bullish rally on stock exchanges, inasmuch as this currency pair is historically correlated with the S&P500 and Nikkei 225 indices. Investors are buying up shares, insofar as the Fed does not plan to reduce the rate of asset purchases in the near future.

On the other hand, a surplus of dollar liquidity in the financial system may cause a correction in this currency pair, inasmuch as they are now at a two-month maximum. The volume of reverse REPO operations of US banks with the Fed last week reached a historical maximum and will exceed $1.3 trillion. Such a surplus of liquidity will not allow the dollar to strengthen strongly.

Trading recommendation: flat 110.00 – 110.90.