EUR/USD: Caution mode on a possibly narrow range

Τhe single European currency once again reacted quickly limiting the losses it suffered yesterday returning again to the levels of 1,09.

As we mentioned several times in previous articles, although the European currency has limited the dynamics of the rise, it has nevertheless managed to create steps to climb on higher levels and try to secure the level of 1,09 again.

The pair yesterday in a behavior that was quite expected and it was already mentioned in yesterday's article, it failed to hold on the peaks of 1,0920 and suffered a correction returning to near 1,0835 where it stabilized again reacting upwards.

This behavior confirmed my thinking that the market remains under confusion as on the one hand the aggressive rhetoric of the European Central Bank remains high in the foreground strongly supporting the European currency, on the other hand I have significant doubts as to whether alone will be able to sustain the further strong upward movement for Euro.

At the same time, the yields on US government debt securities have moved slightly to lower levels, limited their attractiveness, but they remain more competitive than the corresponding European issues.

On today's agenda stands out the announcement of Germany's Ifo Institute on the current situation in the German economy as well as the prospects and some possible surprise is able to give direction to the pair.

Also tomorrow's announcement on the growth path of the US economy in the last quarter it certainly carries more weight and will likely prevent investors from taking large positions today.

In general i do not see any significant change in the latest market picture i remain thinking of buying the US currency at the peaks and correspondingly buying the euro on big and sharp dips as the market looks extremely cautious to take any strong direction for now.