EUR/USD: Euro on rebound mode but 1.0800 level remain a challenge

Vasilis Tsaprounis Independent Analyst

The single European currency is trading near 1.0850 levels in the early trading hours of Friday, having moved away from yesterday's lows as in the wake of the European Central Bank's decision to cut key interest rates by 25 basis points and President Lagarde's speech the exchange rate touched 1,08.

Ecb's decision was fully expected and did not surprise the markets while President Christine Lagarde's statements maintained the same rhetoric, she repeated the central bank's aproach that each decision will depend on macroeconomic data, maintaining concerns about the course of the european economy.

The first reactions of the market were characterized by intense volatility and temporary pressures against the European currency which, however, did not take a large extent and as a result the critical level of 1.08 did not collapse.

The reaction of the European currency near the level of 1,08 has for now fully confirmed my thinking as it was expressed in previous articles as I was targeting the level of 1,08 for a possible long position in favor of the European currency with the aim of some good rebound.

As the dust from the ECB decision slowly settles the overall market picture is expected to remain the same with geopolitical developments and concerns remaining high on the agenda.

The developments on the Middle East front with possible escalation remaining a major risk, while further concern could cause a further escalation in the Asia region between China and Taiwan.

Today's agenda is relatively poor in macroeconomic news with the only standout being Housing Starts in US, so interest shifts to statements from several Fed officials who have a fairly busy schedule.

Bets are currently moving at very high levels relatively over 90% on the possibility the Fed cutting interest rates by 25 basis points at the next meeting.

Exchange rate's drop near the 1,08 levels has currently triggered my thinking to buy the European currency with the aim of some good reaction which I will keep on the table, although the possibility that the 1.08 level being found very soon again under challenge remains high.

Author

Vasilis Tsaprounis

Independent Analyst

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

GBP/USD hits multi-week tops around 1.3560

GBP/USD gathers fresh steam and advances to new three-month peaks near the 1.3560 zone on Friday. Cable’s sharp move higher comes after three daily drops in a row and follows the increasing selling pressure hurting the Greenback.

EUR/USD pops to fresh two-month highs, targets 1.1600

EUR/USD advances markedly, revisiting the upper 1.1500s for the first time since mid-June. The pair’s sharp uptick comes on the back of a strong retracement in the US Dollar amid BoJ intervention chatter and despite steady uncertainty in the Middle East.

Gold picks up pace, approaches $4,400

Gold rebounds toward the $4,400 mark per troy ounce on Friday, reversing the previous day’s pullback. The precious metal’s recovery comes as fresh and intense weakness keep weighing on the US Dollar, while traders keep assessing easing expectations of an imminent Fed interest rate hike and the situation from the Middle East.

Pi Network Price Forecast: PI extends consolidation as bulls eye $0.10

Pi Network (PI) price holds steady on Friday, maintaining a consolidating tone for three consecutive days. Mild retail strength in the PI token remains stable, with Open Interest above $9 million, while social buzz eases. PI token’s technical outlook is mixed, as bearish momentum wanes to neutral, with bulls eyeing the $0.1000 psychological level.

Weekly focus: Some relief in US inflation concerns

Actual inflation data for July came out as expected with a 0.1% m/m increase in headline CPI and 0.2% excluding food and energy. Annual headline inflation remains too high at 3.4% and means that wage earners are experiencing stagnating spending power at best, and core inflation is a bit higher than the inflation target of two percent would suggest.

Why is Crude Oil priced for a reopening the ships haven't made?

Fourteen vessels crossed the Strait of Hormuz on Tuesday. Before the war, the count ran near 120 a day. In the sessions since the waterway was publicly declared open, Brent has drifted back to $87 and West Texas Intermediate (WTI) to $81, both a little lower again on Wednesday, with daily momentum on each unwound from the top of its range in late July to the low twenties now.