COZfx: Euro higher vs. softer dollar

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COZforex: The euro was higher against the softer dollar on Monday as investors looked ahead to this week’s Federal Reserve minutes amid ongoing uncertainty over when the bank will start to pull back stimulus measures.

EUR/USD hit 1.3375 amid US morning trade, the session high; the pair subsequently consolidated at 1.3353, gaining 0.21%. COZforex senior currency strategist Ian• Quigley said, EUR/USD is predicted to find support at 1.3298, and a drop through could take it to the next support line of 1.3269. Meanwhile, the pair is predicted to find its first resistance at 1.3369, and a rose through could take it to the next resistance line of 1.3411.

The euro hit session highs after Germany’s central bank said the European Central Bank’s forward guidance on interest rates was not an "unconditional commitment". In its monthly report, Germany’s Bundesbank said that Germany and other euro zone member states would benefit from record low interest rates set by the ECB.

However, the report added that the ECB’s pledge to keep bank rates at low levels for an extended period would continue to depend on the medium term inflation outlook. The Bundesbank also said it expects German economic growth to return to "normal and steady" rates in the second half of the year, after data last week showed that the economy expanded by a larger-than-forecast 0.7% in the second quarter.

Investors were looking ahead to the minutes of the Fed’s July meeting, due out on Wednesday, for further indications as to when the bank may start to phase out its USD85 billion-a-month asset purchase program.

Expectations that the Fed may begin tapering as soon as September were boosted late last week after data showed that U.S. weekly jobless claims fell to an almost six year low.

(COZ forex UK)