EUR/USD: Dollar may have room for further gains on US GDP day

The US dollar appears to be maintaining mild positive momentum putting pressure on the European currency with the 1,08 level likely to come under challenge soon.

The survey on the course of the manufacturing and services sectors in the eurozone area that was announced yesterday disappointed, showing that the recovery of the European economy has lost momentum.

However, the corresponding figures from the other side of the Atlantic were also announced below estimates, which troubled the markets with an impact on international stock prices and significant losses.

The extremely high prices in the international stock markets are showing signs of decompression in recent days and if this takes an extent the US dollar is expected to benefit further as it traditionally functions as a safe haven currency.

The market picture shows no significant differences with bets relatively unhanged on the prospects for a rate cut by Fed and ECB.

At the moment most bets are centered around the prospect of two more cuts by Fed although the scenarios of one and only or even three cuts are not out of the game.

While on the part of  Ecb, the bets are high that there will be two more cuts in key interest rates by the end of the year.

Today's agenda is extremely rich with the Ifo institute survey on current conditions and business expectations in Germany and the rate of growth in United States standing out.

The European currency is looking for the catalyst to react, otherwise a scenario with further losses and a possible break of 1.08 remains in play.

As I failed to position in favor of the American currency at the high levels of the previous days I am temporarily maintaining a wait position as may it is still too early to consider the prospect of buying the European currency.