EUR/USD: Narrow trading range near 1.1650 remains, with risk of decompression visible

The single European currency is held in a narrow trading range between levels 1.16 and 1.17 for almost a third consecutive week as the summer holidays and lack of surprises in the markets have trapped the exchange rate in a consolidation environment with investors avoiding big bets.

Geopolitical developments, the issue of trade tariffs and central bank interest rates remain high on investors' agendas and will determine the future course of the exchange rate.

President Donald Trump's controversial personality and enigmatic policies continue to raise concerns as surprises could easily come to the table and create major disruption in the markets.

Despite the stormy developments in the geopolitical landscape with the summit between Presidents Trump and Putin, the clouds of war remain over the Ukrainian front, but with hopes this time being the highest in a long time.

Regarding the issue of trade tariffs, the dust has started to settle, but remains a key risk of significant inflationary pressures in the event that there are no good agreements between the United States and China.

Today's agenda is quite rich with important macroeconomic news to be announced for the manufacturing and services sectors in the Eurozone and the United States, but it is expected to be overshadowed by tomorrow's speech by Fed Chairman Jerome Powell at Jackson Hall before Congress.

The consolidation environment in which the exchange rate has been moving lately is expected to break apart soon, but at this time there are no  good bets in which direction.

For this reason, I do not have any significant change in my thinking as expressed in previous articles and I will prefer to remain in a wait-and-see attitude, preferring a sharp new peak for the possibility of buying the US currency.