EUR/USD: The Euro above 1.1100 on mild rise mode in Fed's meeting week
|The single European currency is trading just above 1,11 level at the start of the week with the investors remain cautious ahead of a crucial Fed meeting on Wednesday.
The stormy news and last week's European Central Bank meeting ultimately had little impact on the interbank forex market as the exchange rate range narrowed to just 100 basis points between 1,10 - 1,11 levels as the big surprise did not come to the table.
Τhe meeting on Wednesday will be decisive as the interest rate cut is completely discounted but the big bet is whether it will be 25 or 50 basis points.
The cooling in US labor sector, one of the main pillars of the US economy, has worried President Jerome Powell, and the decision for 50 basis points, although with small probability, is not completely off the agenda.
Ηaving left behind the decision of the European Central Bank, investors are now concentrating their interest on Wednesday when the Fed is expected to take a similar decision.
After US consumer price inflation data released on last Wednesday which was broadly close to estimates bets for 50 basis points cut are much below the 50 % and such a decision would be a big surprise and will affect the US dollar quite negatively.
Today's agenda is relatively uneventful with nothing special and the most likely scenario is for the exchange rate to remain in a narrow trading range near the 1.11 level as in anticipation of the crucial meeting on Wednesday Euro's strong bullish momentum which would surpass the previous highs of 1.12 would be surprising.
Although I believe the mild rise in the euro will soon show signs of fatigue I prefer to stay on hold as coming Wednesday is expected to be stormy and the bets could change dramatically
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