EUR/USD: Direction change in the pair? Not yet the time

Vasilis Tsaprounis Independent Analyst

The single European currency shows significant signs of stabilization, having avoided a further decline last week.

Had a limited range trade around the level of 1,05 but managed to close the week with small profits.

The scenario seems to be maintained with Monday's opening finds the euro trying to approach the 1.06 levels again.

However, we find it difficult to see a strong upward movement for the pair, but this does not exclude seeing higher levels.

Fed's officials maintain hawkish rhetoric, something that keeps US 10-year bond yields high near 3,15 %, creating and maintaining a favorable dollar-buying climate.

The latest IMF data also show that the US economy will avoid the risk of recession and will move at a growth rate of 2,9 % for 2022. However, this estimate was revised much lower than the previous one in April at 3.7%.

The market is waiting with great interest later today the ECB President Christine Lagarde speech, something that has fueled a limited optimism and temporarily strengthens the European currency.

In general, we maintain the neutral position of the previous week, expecting the exchange rate to trade in a range trading in both directions.

Author

Vasilis Tsaprounis

Independent Analyst

Vassilis Tsaprounis possesses over 25 years of professional experience in Capital Markets and especially in the foreign exchange market.

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