Vasilis Tsaprounis
Independent Analyst
The single European currency is trading just above the 1.05 level, having lost part of yesterday's gains, as has been mentioned in previous articles, any attempt by the European currency to maintain a strong upward momentum and change the trend currently has many obstacles.
On the other hand, signs of fatigue from the recent rally in the US currency remain on the table and a new catalyst may be needed for the exchange rate to test the recent lows of 1.0330 level again.
Yesterday's very rich agenda did not provide any significant surprises, giving the European currency the opportunity to maintain a mild positive momentum, testing the level of 1,06 but without success.
The further decline in US Treasury yields once again supported the European currency's attempt to react as the 10-y bond yield fell well below the 4.3 level, approaching 4.2.
This development currently confirms my thoughts as expressed in previous articles, maintaining the assessment that there will be a further de-escalation in the level of yields, with the level of 4.00 on 10-y bonds being a possible scenario for the near future.
The broader market picture remains the same. Geopolitical risks, which remain extremely high, despite the ceasefire agreement between Israel and Hezbollah. Concerns about the course of the European economy, complement the negative environment, weighing on the European currency and put some barriers to further reaction efforts.
Today's agenda is much poorer as American markets are closed for the Thanksgiving holiday, while the only thing that stands out from the Old Continent is consumer inflation in the German economy, which despite its problems remains the engine of the eurozone.
No changes in my thoughts, I will maintain the idea of buying the European currency on new dips near to recent lows , as the US currency's gains in recent weeks have been quite significant and signs of fatigue from the recent rally as it turned out yesterday as well are already on the table.
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