EUR/USD: Pressures on the Euro remain in play with the 1.0800 on risk of collapse

The single European currency remains under pressure and is now approaching the 1,08 level as in the wake of the Fed meeting the Powell's rhetoric created only temporary benefits for the European currency but the follow-up is very different.

The fact that the bets are concentrated on the three cuts in the key rates by Fed and the possibility of only 2 cuts has been removed for now does not change the fact that the interest rates of the US currency remain higher than the European ones, something that gives a slight edge to the US dollar with the prospect of seeing even lower prices in the exchange rate.

Yesterday's economic agenda was quite interesting but without any big surprises. The indicators for the manufacturing and service sectors in the Eurozone and the United States were announced close to the estimates, confirming that the American economy is at a clearly better level than the European one, which, however, shows signs of stability trying to avoid the risk of recession.

One of the biggest risks that remains on the table for the European currency is the high prices in the international stock markets as if there is any strong correction the American currency is expected to benefit further as it traditionally works as a safe haven currency.

I would give a not small probability to such a scenario as I believe that now the prices of the international stock markets are at quite high levels and to continue the same momentum for the next few months would be a big surprise. The difficult question is whether there will be a catalyst and who will be the one who will reverse the very good climate of the last months in the international stock markets.

On today's agenda, the announcement of the IFO institute on the business climate in Germany stands out, while there are some statements from Fed and ECB officials.

The possibility of the US dollar staying on the frontline and the 1,08 level collapsing remains on the table.

I have not strayed too far from my thinking of buying the European currency at much lower levels, maybe near to 1,0700 level or bellow this,  with the aim of one more good correction as  Euro's this ability has proven that remain on the table with very good fidelity.