Vasilis Tsaprounis
Independent Analyst
The single European currency remains firmly above the 1,05 level in the first trading hours of the new week having retreated slightly from the highs of 1,0580 that marked during the Asian zone.
Friday was a tumultuous day in trading as there was sharp volatility in both directions following the US new jobs announcement which surprised analysts as it rose to 263,000 from the 200,000 expected.
The initial reaction was a sharp drop for the Euro, almost 100 basis points in just the first minutes of the announcement with the pair pulling back from the 1,0540 levels to the 1,0440.
However, the US currency was unable to maintain the gains and the temporary positive momentum, with the result that the exchange rate returned relatively soon above the level of 1,05 again, where it remained until the closing of the week.
As I mentioned in Friday's article i was giving a high probability that the US currency would return to some gains which was partially confirmed.
While the strong jobs news created this outlook, wiping out all the gains in such a short period of time was unexpected and surprised me.
Apparently the market was not convinced by the latest development and remains quite cautious about the next Fed's decision for interest rate hike for which the probabilities give more than 80% that Fed will decide for 50 basis points and not by 75 which was the most likely a few weeks ago.
The start of the new week have quite a rich calendar of macroeconomic announcements with retails sales in the Eurozone and manufacturing and services price indices in Europe and the US being awaited with particular interest by investors.
It would be a some surprise for me if all the economic data continues to support the European currency so that it can maintain current levels and create prospects for a further rise.
Although the possibility of seeing some new peaks is still exist , I would not hold positions in favor of the European currency at these levels and would expect some new dips.
A rich agenda of announcements could again provide a high volatility with the pair remaining susceptible to corrections in favor of the US currency.
Note: All information on this page is subject to change. The use of this website constitutes acceptance of our user agreement. Please read our privacy policy and legal disclaimer. Opinions expressed at FXstreet.com are those of the individual authors and do not necessarily represent the opinion of FXstreet.com or its management. Risk Disclosure: Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.
Recommended Content
Editors’ Picks
AUD/USD: Further losses retarget the 200-day SMA
Further gains in the greenback and a bearish performance of the commodity complex bolstered the continuation of the selling pressure in AUD/USD, which this time revisited three-day lows near 0.6560.
EUR/USD: Further weakness remains on the cards
EUR/USD added to Tuesday’s pullback and retested the 1.0730 region on the back of the persistent recovery in the Greenback, always against the backdrop of the resurgence of the Fed-ECB monetary policy divergence.
Gold flirts with $2,320 as USD demand losses steam
Gold struggles to make a decisive move in either direction and moves sideways in a narrow channel above $2,300. The benchmark 10-year US Treasury bond yield clings to modest gains near 4.5% and limits XAU/USD's upside.
Bitcoin price dips to $61K range, encourages buying spree among BTC fish, dolphins and sharks
Bitcoin (BTC) price is chopping downwards on the one-day time frame, while the outlook seen in the one-week period is a horizontal trade. In this shakeout moment, data shows that large holders are using the correction to buy up BTC.
Navigating the future of precious metals
In a recent episode of the Vancouver Resource Investment Conference podcast, hosted by Jesse Day, guests Stefan Gleason and JP Cortez shared their expert analysis on the dynamics of the gold and silver markets and discussed legislative efforts to promote these metals as sound money in the United States.