EUR/USD: Range trading with new dips
New twenty-year lows for the common European currency as it broke down and the 0,9900 level.
The European currency is under pressure after the announcement of new jobs in the US economy on Friday.
Once again we had trap behaviors for the pair since in the wake of the announcement the pair initially moved strongly upward , to come under intense pressure afterwards.
After hitting a new lows at 0.9880 some signs of a reaction have appeared again with the exchange rate retracing above the 0,9900 level.
Markets seem strongly affected by the energy crisis affecting Europe and the burdened psychology acts as a weight for the common currency.
At the moment several data are against the European currency such as the latest developments for a ceiling on Russian oil prices and Russia's reaction to this development and also the expected aggressive policy from the Fed.
Nevertheless, the sensitivity to market surprises remain , like the possible increase in interest rates by 75 points on coming ECB meeting , but the possibility for this is low as the EU economy is under heavy questions.
In such environment there are favorable conditions for exploiting the range of variation of the pair , as the reactions of the European currency continue to exist with great fidelity after the dips.
Today is also market holiday in the United States which may limit large positions by traders but leaves open the possibility of executing stop loss orders due to calm market.
In general we expect pressures to be limited and reactions from Euro will remain in the game.
Author
Vasilis Tsaprounis
Independent Analyst
Vassilis Tsaprounis possesses over 25 years of professional experience in Capital Markets and especially in the foreign exchange market.
