EUR/USD: Euro is under question with 1.1600 level being the next challenge
|The single European currency is approaching the 1.1650 level in the early hours of Monday, having started the new week in an environment of intense doubt, as the geopolitical situation in the European Union continues to be worrisome, with instability in France remaining at the top of the agenda.
We have now entered the 10th week where the exchange rate remains in a narrow fluctuation range of approximately 200 to 300 basis points as the strong upward momentum of the European currency of the previous months continues to show signs of significant fatigue.
Although the European currency has reached some new highs, with the most recently at 1.1920 , 3 weeks earlier, the critical psychological level of 1.20 still remains untouched.
The market picture throughout this period has generally confirmed the basic idea of my thoughts as they have been reflected in previous articles as I preferred to position myself in favor of the US currency at some new peaks , giving a good possibilities to the correction scenario, something that has so far materialized.
Although the situation in US continues to create great concern with President Trump's enigmatic policies, the Fed continues to offer higher interest rates, which currently maybe is the only barrier to the further weakening of the American currency.
Without anything significant in the macroeconomic environment on today's agenda, with the result that interest will focus on geopolitical developments and the speech of President Christine Lagarde.
Although major investment houses have come out in favor of the possibility of the US dollar weakening further, I will maintain a more conservative thoughts and prefer to remain neutral as I give a good chances that the consolidation environment will remain on the table for a while longer and the moment of an upward break of 1.20 remains a question mark.
As the sell on peaks strategy has been successful so far, I will remain in this one for a while longer.
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