The U.S. dollar rebounded this week after last Friday's weak labour market data from the U.S. The U.S. economy added only 38,000 jobs in May.
The majority of market participants do not believe that the Fed will raise its interest rate next week. But market participants speculate that the Fed may hike its interest rates in July. That speculation supported the U.S. dollar this week.
I think that an interest rate hike in July will depend on the U.S. labour market data for June and the referendum on Britain's membership in the European Union (EU) on June 23. In case of the weak U.S. labour market data for June and Britain's exit from the EU, the Fed will likely delay its interest rate hike.
The recent rise in oil prices could provide some support to the U.S. economy as higher oil prices could lead to higher investment in the oil sector and to higher inflation.
It is likely that the currency pair EURUSD will rise toward the psychological level at $1.1400, if there are negative news from the U.S. and there are no negative economic data from the Eurozone.
If the U.S. economic data is better than expected and in case of the negative economic data from the Eurozone, the currency pair EURUSD may test the psychological level at $1.1200 or at $1.1100.
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