Vasilis Tsaprounis
Independent Analyst
The single European currency is trading close to 1,0850 level in the early hours of the new week in a day with a very poor agenda where the limited range trading is the scenario that gathers the most possibility.
A calm Friday allowed the European currency to give a mild reaction and move well away from the lows of 1,08 confirming for now my thoughts as stated in previous articles and the idea to buy the European currency close to the 1,08 level aiming for a good reaction.
Ecb's last Thursday decision it slowly fades away as was fully expected and did not surprise the markets while President Christine Lagarde's statements maintained the same rhetoric, she repeated the Central Bank's aproach that each decision will depend on data, maintaining concerns about the course of the european economy.
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 remainin the major risk at the moment.
Little by little investor interest after moving away from the recent European Central Bank meeting will be carried over to the next Fed meeting where a 25 basis points cut possibility gathers high percentages well over 90%.
I remind that 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 and 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 its now out of the game.
Today's agenda is extremely poor and apart from some statements from Fed officials there is no macroeconomic announcement.
Apart from Friday's soft reaction the European currency looks to struggle to continue its recovery and for this reason I would prefer to lock some small profits from recent position in favor of Euro and remain on hold.
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