Vasilis Tsaprounis
Independent Analyst
The single European currency after an impressive upward movement has managed to return to the levels of 1,07 and now provokes the possibility of climbing to even higher prices.
Friday was indeed a stormy day with extremely high volatility in the wake of major announcements on the path of inflation in the Eurozone and new jobs in the United States.
Although initially the single currency was under intense pressure, retreating even below the level of 1,05, it soon reacted by managing to close the day having absorbed all the losses and having once again surpassed the level of 1,06.
The behavior of the market completely justified my thinking for closing all positions in favor of the dollar before the important announcements.
The trading development confirmed that the market remains confused as both directions have reasons to exist.
Although news on new jobs in the United States was positive for the US currency , Inflation which comes from average wages, fell sharply, and most possibly the Fed will take it into account.
While at the same time the announcement of the contraction of business activity in the service sector in US played a decisive role in the reversal of the sentiment and the sharp losses that the dollar suffered afterwards.
Yields of US government debt securities fell , which also affected this US currency, while the return of the stock markets to better levels reduced the need to buy the dollar as a safe haven currency.
Now in the first hours of the new week the US currency shows to be under pressure and already the pair has tested the level of 1,07.
Nothing very important on today's economic agenda and i have doubts if the euro's latest 200 basis points rally it can continue with same momentum.
The overall picture of the market shows a weakness of the US currency and not a strength of the euro.
I would maintain a wait-and-see attitude at these levels, but considering the possibility of some correction of the recent rise.
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