EUR/USD Likely To Test 2014 Lows Around 1.3475

Last week the world's reserve currency managed to grow substantially stronger on the forex market following the publication of a solid statistics for the US labor market in the month of June. Moreover, currencies such as the GBP, NZD, and CAD showed the most resistance to a decrease, possibly due to the growth of the LIBOR interbank lending rate in the countries that issue these currencies. Last week the EUR/USD pair closed below the key support level of 1.3600 amid Mario Draghi's comments about the acceleration of preparations to launch an asset purchasing program in the European region.

This week market players will monitor indicators such as consumer inflation, industrial production, and the trade balance for the Eurozone's two largest economies - France and Germany. If these indicators go down, the EUR/USD pair will likely test the 2014 minimum in the region of 1.3475.

On Thursday there will be a Bank of England meeting at which a decision will be made regarding the nation's key interest rate and the asset purchasing program. It is expected that the rate will remain unchanged at the level of 0.50% annually and that the volume of assets being purchased will remain the same at 375 billion pounds. Considering the fact that since the beginning of the year the British currency has climbed 4.5 p, we do not rule out the possibility of a downward correction to 1.7050 with a subsequent rise to 1.7220.

We may see interesting movement from the "Aussie" and the "Loonie" when the labor market reports are published in these countries. In June unemployment in Australia is expected to climb from 5.8% to 5.9% and employment is expected to increase by 12,300 people. In Canada employment is expected to remain the same at 7%, while the number of people employed in the economy is expected to grow by 26,200. The AUD/USD pair will probably again test the 0.9330 support level, and the USD/CAD pair might approach its low for the year of 1.0585.

The yen exchange rates may again manifest their unpredictable nature amid 2 important events: publication of the FOMC minutes and the Bank of Japan's decision regarding the nation's key interest rate. By the end of the week the USD/JPY pair may test its July high of 102.75.