EUR/USD: Ηigh volatility most likely for today

Vasilis Tsaprounis Independent Analyst

The single European currency remains below the 1,04 level in early trading time on Tuesday having recovered slightly from yesterday's pressures in a day of extreme volatility.

As we reported yesterday It would be a surprise if the European currency managed to break But also stay above its previous highs of 1,0480.

Although there was a temporary break of the level which was apparently due to the short execution of stop loss orders that were above the 1,0480 level then the pair came under intense pressure correcting around 160 basis points and returning to the 1,0340 levels.

Awaiting today's announcement for the level of inflation in the German economy and then tomorrow's announcement for the eurozone inflation are now the catalysts that will determine whether the exchange rate will move much lower if inflation shows signs of decompression, or if the pair will recover very quickly again to the levels of 1,05 in the case that the numbers will show high inflathion presures and in particular if quite higher than expected.

In her speech yesterday, ECB's President Christine Lagarde reminded the markets that the main tool to limit the level of inflation in the Eurozone is interest rate increases.

Monday's intense volatility it is characteristic of the fact that the exchange rate is currently struggling to find a direction and although it is quite prone to corrections the European currency maintains its basic behavior and reacts quite strongly to the dips of the pair.

The recent decline in oil prices and the temporary decline in natural gas prices which in the last month have shown some behavior to move to lower levels increase the chances that inflationary pressures will show some easing which will limit the Ecb's aggressive rhetoric with consequence the European currency to move lower.

I would give slightly increased odds that the German economy inflation announcement later in the day will show that inflation pressures are easing and the European currency will move even lower.

In any case, I will maintain a waiting attitude until the announcement.

Author

Vasilis Tsaprounis

Independent Analyst

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

EUR/USD hits two-day highs near 1.1820

EUR/USD picks up pace and reaches two-day tops around 1.1820 at the end of the week. The pair’s move higher comes on the back of renewed weakness in the US Dollar amid growing talk that the Fed could deliver an interest rate cut as early as March. On the docket, the flash US Consumer Sentiment improves to 57.3 in February.

GBP/USD reclaims 1.3600 and above

GBP/USD reverses two straight days of losses, surpassing the key 1.3600 yardstick on Friday. Cable’s rebound comes as the Greenback slips away from two-week highs in response to some profit-taking mood and speculation of Fed rate cuts. In addition, hawkish comments from the BoE’s Pill are also collaborating with the quid’s improvement.

Gold climbs further, focus is back to 45,000

Gold regains upside traction and surpasses the $4,900 mark per troy ounce at the end of the week, shifting its attention to the critical $5,000 region. The move reflects a shift in risk sentiment, driving flows back towards traditional safe haven assets and supporting the yellow metal.

Crypto Today: Bitcoin, Ethereum, XRP rebound amid risk-off, $2.6 billion liquidation wave

Bitcoin edges up above $65,000 at the time of writing on Friday, as dust from the recent macro-triggered sell-off settles. The leading altcoin, Ethereum, hovers above $1,900, but resistance at $2,000 caps the upside. Meanwhile, Ripple has recorded the largest intraday jump among the three assets, up over 10% to $1.35.

Three scenarios for Japanese Yen ahead of snap election

The latest polls point to a dominant win for the ruling bloc at the upcoming Japanese snap election. The larger Sanae Takaichi’s mandate, the more investors fear faster implementation of tax cuts and spending plans.

XRP rally extends as modest ETF inflows support recovery

Ripple is accelerating its recovery, trading above $1.36 at the time of writing on Friday, as investors adjust their positions following a turbulent week in the broader crypto market. The remittance token is up over 21% from its intraday low of $1.12.