EUR/USD: Euro in the spotlight but with signs of fatigue above 1.1500 level

The single European currency is trading marginally above the 1,15 level in the early hours of Thursday morning, with the US dollar remaining under mild challenge.

Yesterday's consumer inflation data released in the United States was slightly lower than expected, boosting bets on further rate cuts by Fed by the end of the year.

The significantly higher interest rates offered by the US dollar have so far failed to act as a defence line  against the pressures that the US currency has faced in recent months, and any prospect that this interest rate gap between the euro and the dollar can be narrowed is negative for the dollar.

President Trump's controversial personality and enigmatic policies that often change the facts have troubled investors, especially holders of US government debt securities, putting the US currency on some doubt.

The yield on US 10-year Treasury note has fallen from recent highs of 4.60 and is trading near 4.40, but still, considering the level of the Fed's key interest rates, the levels are quite high, which reflects the environment of concern.

The dust from the recent trade war led by President Trump has begun to settle, something that  supported the significant rally in international stock markets with the S&P barometer index approaching 6070 points,  just a breath away from previous historical highs.

I now have some doubts as to whether this momentum will be able to be maintained, giving some good chances on the scenario that the next 1-3 months will be characterized by some intense volatility with the possibility of some good corrections as the trade war game with the main protagonist  the American president will likely remain on the table.

Although significantly higher, the pair remains in a familiar range of fluctuation as I had mentioned in previous articles, which I had limited to the levels 1,10 to 1,16 and I would see it difficult at the moment, beyond some possible strong divergence, for the pair to break significant levels and move easily to levels above 1.17 - 1.18.

Today's agenda is quite interesting with several statements from officials from the European Central Bank and the producer price index in the United States.

I remain on hold and will reconsider the possibility of buying the US dollar at some sharp peak near the levels I mentioned earlier, in case they come on the table.