Vasilis Tsaprounis
Independent Analyst
The single European currency is trading above the 1,08 level in defensive mode as after 5 consecutive up weeks it is at risk of losing this streak and ending the week with a losses.
Yesterday was quite interesting as important macroeconomic data affected the course of the exchange rate creating some volatility but without the fluctuation range changing much.
The indicators of manufacturing activity and services sector in the Eurozone and the United States pleasantly surprised by initially favoring the European currency but then the corresponding announcement from US erased the Euro's gains and brought the American currency back to the fore.
The characteristic of choppy trading within just 60 points dominated yesterday's overall picture.
The weekly retreat of the European currency and the distance from the levels of 1,10 in general fully confirmed my thinking as it was reflected in previous articles as the fatigue of the upward momentum of the European currency came on the game while the doubts about the possibility of the rise towards the level of 1,10 was clear.
However, the move away from recent highs of less than 100 points I don't think has dramatically changed the picture of the exchange rate which remains trapped in a narrow range with investors avoiding taking big bets.
Today's agenda features the Durable Goods Orders and the University of Michigan survey of consumer sentiment in US.
The risk of a breakdown of 1,08 level remains high although the European currency shows signs of stabilization after yesterday's losses.
There are no significant changes in my thinking, I remain on wait-and-see mode and would like levels above 1,10 to buy the US currency or close to the previous lows of 1,06 or below for the prospect of buying the Euro.
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