EUR/USD: Euro remains steady near 1.0800 level ahead of critical US and EU GDP data
|For the eighth straight day the European currency remains in a very tight range near 1.08 levels as investors avoid taking big bets ahead of stormy news.
Αs the prospects of interest rate cuts from the Fed and the European Central Bank continue to monopolize the interest of investors this week's critical macroeconomic data if they surprise are capable of significantly moving the bets.
Τhe fatigue signs of the recent US currency rally remain on the table fully confirming my thinking as they were expressed in previous articles as I had warning of this possibility, choosing the strategy to buy the European currency at some new dips.
The chance that the Fed will cut rates by 25 basis points at the next meeting is almost 100% and there will need to be significant surprises till the meeting to change that outlook.
From European Central Bank side there are mixed messages as several central bank officials have divergent views, with President Lagarde maintaining the same rhetoric that every decision is decided from meeting to meeting depending solely on macroeconomic data.
Geopolitical developments remain high on the agenda, with Middle East front being the most important risk, something that continues to favor the American currency, which traditionally functions as a safe haven currency.
US Treasury yields remain at attractive levels which have come as a surprise and I would expect some correction relatively soon.
This week's stormy macroeconomic news culminating in US jobs on Friday coupled with next week US election have created a very cloudy environment in which investors are shying away from taking big bets.
I would prefer to remain on a wait-and-see attitude, without however, moving away from my thinking of buying the European currency on some sharp fresh dip near the levels of 1,07.
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