Vasilis Tsaprounis
Independent Analyst
The single European currency remains below at mid-1,08 levels in a soft trading environment pending announcements on the path of development of the Eurozone economy.
The overall market picture shows significant signs of change as the European currency has now lost its upward momentum and entered a soft corrections environment.
As i reported yesterday we are having an extremely important week with stormy news from all the main economies , with growth rates , consumer confidence indicators , etc and culminating the interest rate hike decisions from Fed and Ecb to stands out.
Yesterday's market behavior justified once again my thought that the European currency will find it very difficult to secure the 1,09 levels and stay above them in view of this week's critical news.
US dollar purchase on peaks proved once again a not bad idea as today the European currency shows again signs of mild corrections which may take more extent.
In any case, in view of the important announcements, but also tomorrow's Fed decision , market movements are expected to be more restrained and not break significant levels.
A likely major disappointment in the announcement of European economy growth is logical to put further pressure on the European currency and on the other a positive surprise It will greatly reduce the pressures on it.
I remind that lately the European common currency has discounted several positive data for it, such as the significant de-escalation in natural gas prices that have now moved the energy crisis away from the euro zone while the Ecb's hawkish rytoric remain in play too long.
It may now be more difficult for the common currency to find new data that will be able to feed back a renewed bullish momentum.
In general my basic strategy of buying the US currency at the peaks seems to have performed extremely faithfully lately and I don't see any significant reason to vary it.
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