EUR/USD: Euro's further rebound looks a challenge, fresh losses may in play
|Τhe single European currency has re-secured the 1.08 level trying to develop a mild upside and move further away from the recent lows of 1.0760.
Υesterday's reaction of the European currency was broadly expected as signs of US currency fatigue had appeared on the table while an expected correction in the recent rally in US Treasury yields was almost certain to weigh the US currency.
Τhis development fully confirmed my thinking as reflected in yesterday's article with US Treasury yields possibly having further room for a larger correction.
The crucial data for the services and manufacturing sectors in the Eurozone and US announced yesterday did not surprise, they were very close to the estimates and in this way the room was given to the European currency to ''breathe'', limiting the losses of the last few days.
In the last days there has been a flurry of statements by officials from both main central banks, but they have failed to give new messages about the prospects of interest rate cuts.
Βets are currently approaching 100% the likelihood that the Fed will cut interest rates another 25 basis point by the end of the year while Lagarde's rhetoric remains firm by reminding markets that every decision dependent solely on data, keeping the odds of a corresponding cut of 25 basis points by the European Central Bank steady until the end of the year.
Today's agenda, without being indifferent, does not include any high-profile news, but the announcement of the IFO Institute on the business climate and the prospects of the German economy is certainly awaited with interest , while on the other side of the Atlantic, Durable Goods Orders and the University of Michigan survey of consumer sentiment stand out.
I prefer to stay on hold and re-examine the possibility of buying the European currency at much lower levels maybe near 1,0700 level.
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