The US dollar came under severe selling pressure on Monday and the EURUSD pair rose to 1.1750, boosting precious metals and oil.
Moreover, it looks like the EURUSD pair is forming a massive falling wedge pattern on the daily chart, which is usually a strong bullish formation. A jump above 1.18 might confirm this pattern, with the next medium-term target at 1.20 afterward.
Volatility is expected to gradually increase over the next few days as the much-expected Jackson Hole Symposium starts on Thursday. The market wants Jay Powell to announce tapering, and it appears he will need to do so.
The investment banking giant, Goldman Sachs, thinks that the FOMC intends to formally announce the start of tapering at the November FOMC meeting if all goes well by then and to taper at a pace of 15 billion USD per meeting.
The bank sees a 45% chance that the formal announcement will come in November, a 35% chance that it will come in December, and a 20% chance that it will be delayed until 2022. Goldman puts high odds on a delay beyond November because of the downside risk posed by the Delta variant.