At the end of last week the EUR/USD pair rose to 1.1624 amid falling 10-year bond yields and a general weakening of the dollar. The euro showed weak attempts to rise around 1.1600, though its recovery was fragile. The further dynamics of the European currency will mainly depend on the US Treasury yields, which directly affect the US dollar. The 10-year Treasury bond yield has remained above the critical level so far, supporting the greenback.

A strong resistance was formed around 1.1620 in the EUR/USD pair. If buyers manage to break this level and turn it into support, the next target will be the level of 1.1670. Then they will try to climb 1.1700. At the moment, it is hard to believe it. The basic US statistics have been released, the key conclusions have been drawn. Besides, the dollar is maintaining an upward trend.

Notably, euro bulls have not managed to keep the level of 1.1620 due to Pierre Wunsch and Christine Lagarde's statements about a temporary jump in inflation and then a strong report on US retail sales which were released on Friday.

Currently, the major currencies are showing mixed dynamics. China's data and rising 10-year bond yields are exerting pressure on risky assets. China published weak GDP and retail sales reports. Both readings are worse than expected.

On Monday, the economic calendar has almost no relevant events. Besides, no directional moves are expected in the currency pairs. The euro is trading below 1.1600 and there is support in the bearish channel at 1.1570-1.1575. If the bulls manage to hold above these levels, they will have a chance to continue rising from Tuesday provided favourable factors.

The worst scenario for the euro is a decline to 1,1530. The situation, as mentioned above, will largely depend on the dynamics of the Treasury yields and the EUR/GBP pair movement.

Notably, the news and statements that increased appetite for risk, were released the day before. The head and CEO of the FRB of Philadelphia Patrick Harker said that the markets should not expect to raise rates until late 2022 or early 2023. Inflationary pressures will start to fall soon. This year inflation will amount to 4%. However, next year it will decrease by slightly over 2%. At the same time, Harker, like most of his colleagues, backs reducing the quantitative easing program.

The EUR/USD pair is likely to climb to 1.1700 before the FOMC meeting. The Commerzbank leaders hold a similar opinion, analysts forecast the strengthening of the euro to 1.1756. The euro did not hit a new low at 1.1522. So, the market will make an upward correction in the near term.

At the same time, the euro downtrend is possible. The US dollar lost some of its advantage last week. However, it is too early to note a weakening of the bullish interest. The last episode of the rally was almost similar to the previous one. The index of the US currency was rising to 94,55. Its rebound should be regarded as a correction until the break and fixation start below the level of the previous low at 93.69.

There is a level of 1.1492 below the unconfirmed low at 1.1522 in the EUR/USD pair. It will be the next to break, in case the dollar rises and euro bears demonstrate activity. The key support in the EUR/USD pair is at 1.1395. It has been a bearish trend since 2008.