Vasilis Tsaprounis
Independent Analyst
The European single currency is trading just above the 1,0850 level as it is in mild retreat mode after Wednesday's significant rally in the wake of US consumer inflation data that acted as a trigger for the greenback to be under significant pressure.
Latest inflation data from US has changed bets on the prospects for a key rates cut by Fed with the likelihood of the first cut happening in September rising.
As I mentioned in yesterday's article the European currency is showing signs of fatigue of the last rally and the possibility of easily breaking the level of 1,10 is limited.
Υesterday's agenda did not give any significant surprise as all the announcements were close to the estimates.
Now the interest shifts on today's agenda where the course of consumer inflation in the eurozone stands out together with several statements by Fed officials.
There are no major changes in my thinking as I continue to doubt about the ability of the European currency to easily move above the 1,10 level and stay above it as interest rates continue to be clearly higher for the US dollar vs. Euro, something that remains for now one of the main advantages of the American currency.
I remain on hold at these levels, expecting possible levels well above 1,10 for the prospect of buying the US currency, while after the failed attempt to buy the Euro at the lows of 1.06, I think that some possibility that these levels will be tested again is still in the game.
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