EUR/USD: Buy on dips sell on peaks still on game
|The single European currency has returned to mild bullish momentum as fears that gripped global markets about banking institutions have eased significantly.
The latest developments with the injection of liquidity to the First Republic Bank in the United States have restored the positive climate in the global stock markets, something that significantly favors the European currency as the needs for dollar purchases as a safe haven currency have been limited.
In general the behavior of the market remains the same as once again the European currency came under pressure and reacted relatively quickly.
Yesterday day did not give any surprise as the European Central Bank's decision to increase by 50 basis points was fully expected and President Lagarde's statements were extremely balanced avoiding giving a more aggressive and less aggressive tone.
Μarkets remain cautious about the European Central Bank's ability to continue its aggressive rhetoric and proceed with another bold increase in interest rates at the next meeting, especially after the latest developments where, as things show, high interest rates are capable of creating tremors in banking sector.
At the same time The decision by the fed to raise interest rates by 25 basis points its the most likely , While bets on a different decision remain in play , with some talking that it may not go ahead with an increase due to the latest developments in US banking sector , While the more agrresive consider 50 basis points to remain on the table.
Once again the European currency maintained its main characteristic as after the temporary pressures it received in the Ecb decision and was test the 1,0550 , very soon it reacted by coming back relatively comfortably and again above 1,06 recalling that I have mentioned many times about this behavior that still exist with excellent faithfulness.
My thought on the market direction It has not changed , even if temporarily was well above of 1.07 , levels faraway from 1,05-1,07 range seems to be struggling to secure and although the European currency is reacting easy and fast I would be surprised if it could maintain a strong upward momentum for a long period of time.
Today's agenda contains some announcements but we will hardly see any big surprise and for this reason the strategy remains the same Buy on dips Sell at peaks.
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