Vasilis Tsaprounis
Independent Analyst
Τhe single European currency is trying to pare yesterday's losses and recover back to near the 1,07 level as the environment remains cloudy with investors avoiding big bets.
Τhe prospect of a cut in key interest rates from Fed and ECB continue to monopolize interest and are currently the main catalyst affecting the exchange rate.
The dust from the turmoil caused by the recent euroelections as well as the upcoming elections in France has settled and does not currently appear to be affecting the euro in a very negative way.
Yesterday's agenda did not provide any surprise with the interest now shifting on today's agenda which is considerably richer with the growth rate in US standing out.
Τoday's fundamental macroeconomic data is capable, if surprising to significantly increase volatility and critical levels such as a 1,06 or conversely 1,08 to come under challenge.
In any case the interest rate gap in favor of the US currency remains on the table and may be the key catalyst to drive the US dollar even higher in the medium term.
Οn the other hand the pair remains heavy, the European currency reacts with relative ease and strong reaction scenarios with a significant bounce are likely to remain in play.
For this reason I remain on hold, without however, moving far away from my thinking of buying the European currency near the levels of 1,06.
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