EUR/USD: Euro's reaction remains on the table but questioning may come back into play

 The single European currency surprised once again and kept in play the reaction of the last three days having now moved well away from the critical level of 1,07 .

Although I am one of those who believe and have stated many times in previous articles that one of the key features of the euro is its ability to keep very good reactions in play,  yesterday's behavior has surprised me as I do not believe that the slight retreat of ISM index for US services sector acted as the only strong catalyst for the Euro's strong reaction.

Most data continues to favor the US currency while yesterday's announcement on the downward trend of consumer inflation in the Eurozone strengthens the chances for three key interest rate cuts by the European Central Bank in 2024,  which if in line with the corresponding Fed will not differentiate the advantage at the level of key interest rates in favor of the US dollar.

Most data continues to favor the US currency while yesterday's announcement on the downward trend of consumer inflation in the Eurozone strengthens the chances for three key interest rate cuts by the European Central Bank in 2024 ,  which if in line with the corresponding Fed will not differentiate the advantage at the level of key interest rates in favor of the US dollar.

Αnd today's agenda is quite interesting with at least four speeches from Fed members, US  weekly unemployment benefits data alongside some euro zone manufacturing and service sector data.

I believe that the very good reaction of the European currency in the last three days is likely to encounter signs of fatigue and investors will probably maintain a wait-and-see attitude in view of tomorrow's crucial data.

Τhe market behavior of the last few days has once again confirmed my thinking and desire to buy the European currency after some dip but once again I missed the right entry point as I was waiting for levels much  below 1,07 to materialize this thought.

I remain on hold waiting for tomorrow's data, but I will consider the possibility of buying the US currency in the event that by tomorrow the European currency reaches much higher prices above the 1,09 level that could not be justified either by unemployment benefits data or by Fed's officials statements.