EUR/USD: Euro on reaction mode below 1.0400 level but the climate still favors the Dollar
|The single European currency is trying to approach 1,04 level again in the early hours of Friday as the dust from the recent Fed meeting has not yet settled, keeping the American currency in the spotlight.
The market's development and behavior so far seems to confirm my thoughts and my desire to buy the European currency near the previous lows of 1.0330 with the aim of some good reaction, something that has already happened twice in almost 48 hours.
The aftermath of the Fed meeting on Wednesday night remains high on the agenda, having significantly changed bets on the prospects for further interest rate cuts by Fed in 2025.
However, after the first shock, the European currency is trying to balance itself, it has already reacted twice from the low levels on Wednesday evening and seems determined to fight in order not to collapse.
Despite yesterday's macroeconomic news being clearly in favor of the US currency, the European currency avoided new pressures, which creates expectations that any further losses will be limited and we will not see the phenomenon that was witnessed about two years ago when the European currency collapsed, with prices much lower than 1/1.
Today's agenda is quite interesting with the personal consumption expenditure index standing out, which as is known is the Fed's favorite indicator, which it closely monitors and is usually the most critical harbinger of the course of inflation in the American economy.
In view of the very recent Fed meeting, there will have to be some significant surprise to change the bets. While the agenda is complemented by the University of Michigan's research on consumer confidence, which is always followed with interest by investors.
The strategy of buying the European currency during a sharp dip seems to be working so far, so I won't change my thoughts.
Even if the scenario is observed in which the American currency remains in the spotlight for some time, I believe that any new dips, perhaps even to lower levels, will be accompanied by new reactions from the European currency.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.