EUR/USD: US Dollar remains in consolidation mode near 1.1300 level as further gains looks a challenge
|The single European currency is trading just above the 1,13 level in the early hours of Monday morning. Friday's close saw the US currency post modest gains for a second consecutive week as the dust appears to have settled from President Trump's enigmatic policies and concerns about the impact on the US economy have eased.
The market behavior last week broadly confirmed many of my thoughts as reflected in recent articles as indeed a good correction in the recent rally of the European currency came to the table while the 1.13 level was, albeit temporarily, broken.
However, many investors continue to have significant doubts about the ability of the US dollar to return to significantly higher prices, justifying these concerns by the volatile environment created by President Donald Trump and the significant lack of confidence in his policies.
The past week was extremely rich with many stormy news, culminating in the new jobs announced on Friday, which surprised positively, alleviating the concerns about the US economy from the macroeconomic news of the previous days.
On the other side of the Atlantic, the Old Continent showed signs of resilience as the macroeconomic news that was announced was close to estimates but without the big surprise.
As efforts to de-escalate the looming trade war continue with several negotiations underway between the United States and key trading partners, some calm has returned to international financial markets with stock markets closing higher for a second consecutive week.
Concerns about US debt securities, although they have eased, have not gone off the agenda with the 10y bond yield hovering near the 4,3 level.
Today's agenda is relatively poor and the only thing that stands out is the ISM index for the path of the services sector in the United States.
I have not changes in my mind. The concern and fear regarding President Trump's controversial behavior remain, and that is why I prefer to remain in a wait-and-see attitude.
Perhaps giving some good probability to the scenario that the consolidation behavior will continue and the exchange rate will be maintained for the foreseeable future between levels of 1.11 - 1.16.
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