The EUR/USD pair starts the new week on a restrained note, trying to consolidate its recent heavy losses. Spot prices are currently trading around the 1.0700 mark.

And along with the modest growth of the US dollar, this confirms the short-term negative outlook for the EUR/USD pair.

The Federal Reserve's hawkish surprise at the end of the June monetary policy meeting, indicating only one rate cut in 2024, still supports an increase in U.S. Treasury yields. In addition, the ongoing geopolitical tensions in the Middle East are another factor supporting the dollar as a safe haven currency, suggesting that the path of least resistance for the EUR/USD pair lies down. Moreover, signs of a weakening of inflationary pressure in the United States suggest the first Fed interest rate cut in September.

Such forecasts were further supported by Friday's data on the United States, according to which import prices unexpectedly fell in May, which further strengthened the forecast of domestic inflation. In addition, a study by the University of Michigan showed that consumer sentiment in the United States deteriorated sharply in June, and this, in turn, deters dollar bulls from aggressive purchases. Accordingly, this will help limit the losses of the EUR/USD pair.

Today, on Monday, no important economic data is expected from the United States, as a result of which spot prices will depend on the current situation in the eurozone.