No major events are expected today.

The euro begins the new trading week under pressure from heightened demand for the US dollar. Following the speech by Fed Chair Kevin Warsh, market participants raised the probability of monetary policy tightening at the September meeting. Rising short-term US bond yields are supporting the dollar and limiting a recovery in EURUSD at the start of the European session.

The single currency’s own fundamental backdrop remains relatively stable. Eurozone inflation has approached three percent, and the market allows for further rate hikes by the ECB. However, these expectations are already largely priced in and do not yet outweigh the fresh repricing of Fed policy. An additional constraint for the euro is investors’ cautious approach to risk amid high oil prices and ongoing geopolitical tensions.

The primary factor of the current session is the advantage of the US currency, driven by expectations of a higher Fed rate and rising US yields. Support for the euro from the prospects of ECB policy tightening may slow the pair’s decline, but it does not provide a sufficient basis for a reversal. As long as US statistics do not contradict hawkish rate expectations, the fundamental balance allows for further weakness in EURUSD.

Recommendations: SELL 1.15870, SL 1.16270, TP 1.14910.