The absence of important fundamental statistics affects the selling on Monday, August 7.
On Friday, the US dollar strengthened quite well against a number of world currencies. However, on Monday, traders preferred to take a pause in the morning, placing emphasis on the speech of the Fed representative which is scheduled for the North American session.
Some leading economic agencies noted that the good economic data that is expected for the US economy this week will continue to support the US dollar while bad data can be ignored by the market.
If you look at the beginning of the year, you can see that the euro strengthened by more than 1,400 points against the US dollar. Moreover, since the beginning of July, any sufficiently acceptable correction that could indicate overbought in a trading instrument was not observed in the EUR/USD pair.
On the other hand, a number of economists say that the current overbought in the euro does not necessarily lead to its correction, especially in tandem with the US dollar. Many hedge funds missed the summer rally of the euro. In early autumn of this year, they can try to fill losses by increasing the reserves of the European currency.
According to the Futures Trading Commission, the net long position for the euro is only 25% of all rates for this currency. This again proves the confident position of the risky asset which will continue to be in good demand. Any hints of the ECB on the reduction of the asset repurchase program will also lead to the continuation of the growth of long positions in the European currency in the start of autumn this year.
As for the short-term technical picture, the euro remained unchanged compared with the morning forecast. Looking at sales recommendations after the return of the trading instrument to the level of 1.1790 with the main goal of reducing the support area to 1.1740. A breakthrough in this area will open up the possibility of the euro falling to new weekly lows at around 1.670.
Today, it became known that Beijing continues to tighten control over the outflow. The currency reserves of China in July for this year rose. This is also due to the weak position of the US dollar. According to the report of the People's Bank of China, foreign exchange reserves increased by 23.93 billion US dollars compared with the previous month and amounted to 3.081 trillion dollars. Economists expected that the currency reserves in July will increase by 15 billion dollars.