EUR/USD: On consolidation mode near 1.0850 most probably for today

The single European currency is under mild pressure during the first day of the week, but there are no signs of collapse.

After the impressive rise in November the single European currency has in recent days retreated from the highs of 1,1017 and the scenario of December having the same picture gathers quite a small chances.

The general picture of the market remains the same and most of the  bets continues to be monopolized by inflation in the two main economies and the outlook for the path of key interest rates.

Last week's evidence of a further easing of inflationary pressures in the eurozone acted as a weight on the European currency. 

The exchange rate has corrected for more than 150 basis points and the behavior of digesting the levels of 1,08  - 1,10 is a scenario that can be observed in the coming days.

Today's agenda is quite rich in statements by European Central Bank officials with President Lagarde standing out.

No surprise is expected in the statements and the rhetoric maintained by the European Central Bank lately would be difficult to change.

The latest data on the containment of inflationary pressures in the eurozone bring closer the possibility of a cut in key interest rates in the first quarter of 2024 but certainly fresher data will be required for better conclusions.

Αlthough I missed the opportunity to position myself in favor of the US dollar at the 1,10 level as I was expecting a bit higher prices I will not change my mind and I remain for now on hold as I believe that before the next big move the market will digest the levels at which it is now.

And let's not forget that this week ends with the announcement of new jobs in the United States which traditionally if there is a surprise creates a lot of volatility in the exchange rate.