EUR/USD: Will the euro manage to maintain 1,04?
|The single European currency is trying to secure the level of 1,04, as it was highly favored during the day yesterday after the announcement of the minutes from the last Fed's meeting confirmed a more dovish tone on the prospect of a rate hike by the central bank.
At the same time, some economic indicators for the development of the course of the European economy do remain in an environment of contraction, but the announcement was slightly better than expected .
Yesterday was extremely favorable for the European currency on all announcements, which led to a mild upward momentum but failed to stand well above the level of 1.04.
But something that is trying to achieve today as during the first hours of trading the pair already marked high at 1,0450. I estimate that this was a continuation of yesterday's momentum once there was no other development till now where to justify this further rise.
Yesterday's trading day only partially confirmed my thinking as indeed there was a enviroment with high volatility in a multi-news day with most of this ultimately favored the European currency, but this was a bit of a surprise.
Today's further rise towards the level of 1,0450 but also the subsequent correction that has brought the pair already to the levels of 1,04 shows a difficulty for the European currency to be able to easily maintain these levels in order to create the base to move further higher.
Today's economic agenda is limited to German IFO index, where the latest developments on the outlook for the German economy and the business climate will be announced as well as the Minutes from the last meeting of the European Central Bank, While on the other side of the Atlantic due to the Thanksgiving day there is no announcement and the depth of transactions is expected to be limited.
The prospect of a further correction and pair going back below the 1,04 level is quite likely, as only a strong data for the Ifo index, with parallel confirmation of aggressive rhetoric from the last ECB Minutes, will be able to re-fuel a strong new upward momentum for the European currency.
Maintaining a wait-and-see attitude would be the recommended strategy for today, gathering a little bigger possibility the European currency to correct further.
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