EUR/USD: Euro on mild rebound mode after French elections

The single European currency is in a soft recovery environment having already secured the level of 1.0750 in the wake of the French elections where the far right came out strengthened but so far the future of the eurozone does not inspire concern.

Investors did not see the result as a game changer and the mild recovery of the European currency is still too early to be considered a change in momentum.

After the short break and fixation on the election results, markets are expected to return to the main catalyst affecting the exchange rate of late which is none other than the prospects for a cut in key rates by  Fed and ECB.

For now there is no major change in the bets with the odds remaining for two more cuts from the ECB and possibly one cut towards the end of the year from the Fed.

On today's agenda, the announcement on the course of inflation in the German economy stands out, as well as the speeches of President Lagarde.

I have some doubts as to whether the mild dynamics of the euro can last long as it may still be early to see a reversal of the trend and a return of the euro to the levels of 1,10.

The interest rate differential in favor of the US currency remains on the table with the possibility that it will widen be quite high, which acts as the main weight in the European currency's attempt to develop strong upward momentum.

There is no change in my thinking, I remain on hold waiting for levels near 1,06 or below to position myself in favor of the Euro.