EUR/USD: Buy on dips and sell in upticks remain in play as the best idea for now
|The single European currency remains close to the levels of 1,05, maintaining the pattern of recent weeks.
The election results in Germany confirm the possibility of political uncertainty as efforts to form a coalition government by the conservative party have begun.
At the same time, the cloudy environment regarding President Trump's intentions on the issue of tariffs remains. Although there are some initial decisions on the table, everyone now agrees that President Trump is quite unpredictable and has proven that he can very quickly and with relative ease reverse his own decisions and change direction.
The significant developments on the Ukrainian front, where the possibility of an agreement in the near future is starting to increase, do not currently appear to be significantly affecting the exchange rate, but it is certainly not an issue that, if it develops optimistically, will burden the European currency.
We are in almost the sixth consecutive week where the same pattern is observed in the behavior of the exchange rate with the fluctuation range having been limited between the recent lows at 1.0175 and in areas just above the 1.05 level.
The behavior of the exchange rate has fully confirmed my thoughts as they have been expressed in previous articles and I see no significant reason to deviate too much from these thoughts.
But its also logical that after 6 weeks where the exchange rate maintains the same pattern, the chances of the scenario will change is increasing.
Today's agenda is relatively poor with Germany's growth data, which was announced earlier, not providing any surprises, while on the other side of the Atlantic, there is no significant macroeconomic news.
As we are quite far from the recent lows we are probably not at the right levels to consider buying the European currency on a dip and I would prefer a further peak near the 1,07 level for the possibility of buying the US dollar.
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