EUR/USD: Dust from Fed remains on the table – What's next ?

The single European currency remains on the defensive as the reaction has not come to the table for now.

As the dust from the Fed meeting has not yet settled the climate continues to favor the US dollar mainly due to the pressures on the international stock markets which increase the need for dollar purchases which traditionally functions as a safe haven currency.

Despite the initial reaction the exchange rate remains in an environment of confusion as after the FED's decisions nothing else appears in the immediate future that could create big bets.

Beyond the course of the international stock markets, which continue to have a direct correlation with the course of the exchange rate, the picture remains focused on the financial data announced in the two main economies, which continue to have the same style.

The US economy continues to be in a better climate compared to its European counterpart and so far the high prices of key interest rates have had a limited negative impact on the economic fundamentals.

But let's not forget that not a long time has passed since the peak of key interest rates and as is well known there is always a lag gap between the real economy and the level of interest rates. 

The single European currency, while still in doubt, has so far managed to pare significant losses following the Fed's decision. 

My previous thinking as reflected in an earlier article has broadly confirmed the assessment that the single European currency will avoid collapse and the reaction will remain on the table although so far this is quite limited.

Μy placement at the levels of 1.0650  2 days before the fed decision with the thought and aim of an immediate reaction partially confirmed,  as indeed the market from the levels of 1,0650 moved upwards to the levels of 1,0750 but without being able to secure these levels before the Fed's decision.     

Although the reaction of 100 points on first confirmed the thought as it was formulated, nothing has changed in my basic strategy and beyond the temporary pressures that the European currency receives the reaction which can come back to the table perhaps it will be of greater extent.

On today's agenda, the announcements on the course of the manufacturing and service sector in the United States stand out and are expected with particular interest by investors as a small decline will give the European currency the opportunity to return to a reaction environment more easily.