EUR/USD: Euro remains in the spotlight with mild upward momentum
|Τhe single European currency for the seventh day in a row is moving in positive territory trying to develop a mild upward momentum having managed so far to secure the 1,0860-80 level.
Yesterday's announcement of the Minutes from the last Fed meeting did not cause any surprise, with the consequence that the recent mild rise of the European currency was not called into question and thus created the scope for further rise.
At the same time, the return of the international stock markets to a positive environment with the barometer index S&P returning again above 5,000 points reduced the needs to buy dollars which traditionally functions as a safe haven currency and often has a negative correlation with stocks .
The US currency appears to be quite challenged, with the aggressive rhetoric of Jerome Powell and the rising inflation rates a few days earlier having faded is looking for some new catalyst to return to an upward momentum.
Apart from the risk tolerance environment which certainly favors the European currency I don't see any other significant reason why the Euro could continue for long the reaction of the last few days and I expect that soon there will be signs of fatigue of this rally.
A possible change in this thinking could be today's data on the course of the European and US economy with the important indicators of the manufacturing sector being announced.
I remind that all the previous days I always preferred to position myself in favor of the European currency but unfortunately I missed the entry point as I expected prices well below the levels of 1,07.
Perhaps this prospect has not yet been entirely out of te table.
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