EUR/USD: Tough battle around 1.0800 level with Εuro on defense mode
|The single European currency has returned marginally above the 1,08 level as it tries to absorb yesterday's mild losses in an environment where investors remain extremely cautious.
The US dollar despite not being favored by yesterday's macroeconomic announcements which troubled, found support from the risk aversion climate that prevailed in the international stock markets which traditionally favors the US dollar as it acts as a safe haven currency.
The applications for unemployment benefits in US that were announced yesterday and the ISM index for the course of the manufacturing sector which did not catch the estimates widened the concerns about the course of the American economy and although the signs of recession have not come to the table some question marks remain.
The small deviations in announcements have broadly not changed the bets with the most odds remaining for 2 rate cuts from Fed and Ecb by the end of the year.
Today's agenda is monopolized by the US non-farm payrolls announcement which traditionally if there is any significant divergence acts as a catalyst for high volatility in the markets and a possible change in bets.
In an environment where risk aversion may persist and the interest rate differential between the dollar and the euro does not appear to be narrowing the US dollar has reason to remain in the spotlight.
On the other hand, the European currency, as it proved once again during yesterday's day, maintains its ability to react with exceptional fidelity.
Having failed to find a good level to buy the US currency well above the 1,09 my thinking remains on hold and I will consider buying the euro near the 1,06 level.
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