EUR/USD: Euro still on rebound mode

The common European currency continues to be in recovery mode as it has already approached 0.99 level.

Positive sentiment has returned to the stock markets and this has reduced the needs to buy the safe-haven dollar.

For the second day in a row , the main barometer indices S&P and Eurostoxx  are posting gains.

Despite the disappointing news about the course of manufacturing activity in the US economy that was announced yesterday , the market ignored it and the main stock indices moved strongly upwards.

After a sharp fall in September several investors showed their willingness to position themselves from the beginning of the new month  at the low levels that had already formed .

The question is whether the last major reaction of the euro and the stock markets will last.

Despite the latest reaction prices continue to be low and the euro exchange rate continues to be below the critical level of 1/1.

The  speech later in the day by the president of the European Central Bank, Christine Lagarde, is expected again with interest from investors.

The broader picture of the exchange rate it does not appear to have major changes and despite the recent upward reaction the pair continues to be in downtrend  channel that has started since May 2021 from the levels of 1,22.

The upper end of this channel is  close to the 1.0150 level , something that i think is very difficult at the present time to be able to break it upwards.

As the main causes that sent the euro down continue to be in the foreground the chances of new pressures remain.

I would prefer to keep  a neutral position as the pair is right in the middle of this channel and I would remain faithful to the basic strategy of buying the Euro on dips which has not disappointed so far.