EUR/USD: For second day, a poor agenda may help the Euro to defend 1.0800 level

The single European currency remains in a narrow trading range just above the critical 1,08 level as the very poor agenda has kept investors away from taking big bets.

Yesterday as expected did not provide any surprises, the range of fluctuation was limited with the European currency's attempt to recover not lasting long.

After a limited reaction the European currency was once again under mild pressures justifying my thinking to lock in the very small gains in favor of the euro and remain on hold.

The general picture of the market remains the same with the prospect of further interest rates cuts by ECB and Fed monopolizing the interest of investors.

The retreat of inflationary pressures below Ecb's  2% target combined with the weak growth of the European economy keeps the bets high that at its next meeting it will decide on another reduction of 25 basis points.

On the other side of the Atlantic the announcement of better-than-estimated data on the labor sector in the United States 3 weeks ago but also the maintenance of inflationary pressures was the main catalyst that help the US currency to develop a positive momentum.

The exchange rate has now moved quite far from the recent highs of 1,12 as the possibility of 50 points interest rates cut by Fed that was on the table a few weeks earlier it's now out of the game.

As the dust from the ECB decision slowly settles the overall market picture is expected to remain the same with geopolitical developments and concerns remaining high on the agenda.

The developments on the Middle East front with possible escalation remains the major risk at the moment.

The only thing that stands out in today's agenda are some statements by President Christine Lagarde, in which most probably she is not expected to refer to Ecb's prospects and the next moves.

I prefer to stay on hold and re-examine the possibility of buying the European currency at much lower levels as breaking the crucial 1,08 level remains a challenge with a good chance.