Vasilis Tsaprounis
Independent Analyst
The single European currency continues to receive mild pressures having retreated marginally below the levels of 1,0850 pending important data on business activity in the eurozone and US.
Doubts on the European currency was a feature of yesterday as well and now the possibility of 1,10 level being under challenge is starting to recede as signs of fatigue of the previous bullish momentum of the European currency remain on the table.
The US currency also seems to find mild support from the risk aversion climate that has been on the table for the last few days which if it continues could lead the euro to lower prices.
Today's agenda is quite interesting with surveys of the path in services and manufacturing activity in the eurozone and the United States standing out.
As they are harbingers of economic growth, the markets follow them with great interest and possible surprises could strongly affect the exchange rate.
The overall market picture remains the same with no significant changes in bets on the prospects for a Fed and ECB rate cuts.
Even with the rationale that both central banks will proceed with the projected reductions, the gap in interest rates in favor of the American currency remains on the table, something that currently acts as the main weight in the effort of the European currency to easily move above 1,10 level.
Τhe single European currency has corrected more than 100 basis points from the highs of 1,0950 that was a few days earlier with the possibility of this correction continuing to remain on the table.
As I failed to find the right buy point in the US currency, I am currently on hold.
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