Vasilis Tsaprounis
Independent Analyst
The single European currency is trading near 1,0750 levels in the early hours of Wednesday as little news has come to the table with the pair remaining extremely heavy looking for some direction.
The Euro's attempt to maintain a reactionary environment soon showed signs of fatigue and I maintain my doubts about the euro's ability to currently change momentum and approach 1,10 levels relatively easily.
In general nothing has changed in the game with the US dollar clearly maintaining an advantage mainly due to the interest rate gap which has been widened by the latest rate cut by the European Central Bank and bets on further widening by the end of the year remain strong.
Recent statements from Fed officials but mainly from Chairman Powell has narrowed the chances of two rate cuts from the Fed with one and only one by the end of the year currently being the baseline scenario.
Today's agenda is quite interesting with quite a bit of macroeconomic news but mostly the announcement of the minutes from the last Fed meeting.
The avoidance of investors for big bets continues to be the main feature in the markets resulting the narrow range of fluctuation either side of 1,07 level remains on the table.
There are no changes in my thinking, I remain on hold and although the exchange rate has moved away from the levels of 1,06 where I had set the objective to buy the European currency the possibility of a return to these levels remains good.
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