EUR/USD: Without big bets on the table in a tight market during Xmas holidays week
|The single European currency is trading above the 1.04 level, trying to defend the mild reaction of the previous two days after the significant pressure it received in the wake of the Fed meeting last Wednesday.
The dust that has settled from the Fed meeting combined with the holiday week we are entering due to Christmas is expected to greatly limit betting, with the result that the exchange rate will most likely remain in a limited range of fluctuation.
The European currency's attempt so far to limit further losses and defend its recent lows of 1,0340 has been successful, confirming my thought of buying the European currency with the aim of some good reaction.
Market's picture remains the same with the main factors that have pressured the European currency in the last 3 months still on the table.
Geopolitical risks, political developments on the European continent, the interest rate differential between the dollar and the euro, and concerns about the course of the European economy remain high on investors' agendas.
On the other hand, the exchange rate is already at relatively low prices, which makes it difficult for the American currency to expand its gains and increases the chances of scenarios of some good reactions from the European currency.
Today's agenda is relatively poor without anything important and in combination with the entry of the festive season due to Christmas, surprises may is difficult to come to the table, consequently the most likely scenario is for the exchange rate to remain in a narrow fluctuation range near 1,04 level.
The idea and strategy of buying the European currency on a sharp dip near the lows of 1,0340 turned out to be a good idea, but in view of the holidays I would prefer to lock the small gains and remain on hold.
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