Vasilis Tsaprounis
Independent Analyst
The pressures on the common European currency have returned as the significant reaction after the announcements on the course of the inflation in US economy was only temporary.
As we mentioned yesterday, there do not currently seem to be any reasons for the recovery of the common currency to last a long time, as the fundamental problems in the European economy remain.
Although this reaction could have led temporary above the level of 1,04, this was not achieved and the maximum point that the euro managed to trade was 1,0370.
The market after a prolonged period that was locked in a narrow range of variation, brokes some important levels finding a good excuse from the announcement of the inflation data.
The US consumer sentiment survey announcement is expected with interest later today and is likely to fuel the pair's direction.
On the weekly chart the channel remains bearish with the temporary top of the bearish line currently bringing a possible peak at the levels 1,0430-50.
With the current macroeconomic and technical picture we consider it difficult the pair to break and stay above this trade line.
Although the momentum has returned mildly downward , we don't see any major reasons when the euro will soon collapse towards the levels of 1/1 So the most likely scenario is to return to the previus pattern. Good corrections on market dips.
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