EUR/USD: Tariffs on the table, intense pressures on the Euro
The recent speculation surrounding the prospect of President Trump imposing tariffs has resulted in the single European currency coming under intense pressures on the opening the week with a significant gap against the euro.
Αs a large group of analysts estimate that this prospect will lead to new inflationary pressures in the American economy, consequently, the Federal Reserve of the United States is expected to maintain key interest rates closer to current levels.
This outlook keeps the US currency in the spotlight and gives it room to move higher, with the 1/1 level likely to be challenged at some point.
I maintain a somewhat more conservative view on the ability of the US dollar to remain in the spotlight without significant pauses and I have not moved away from the idea of buying the European currency at new lows.
Although we had some developments with the imposition of tariffs by President Trump, the general picture of the market has not changed significantly. This development was relatively expected and the pattern in which the exchange rate has been moving in recent weeks is likely to be maintained.
Today's agenda is quite interesting, with the consumer price inflation index in the Eurozone and data on the course of the manufacturing sector in US standing out.
As I mentioned above, the development with the imposition of tariffs is not a huge surprise, it was generally expected, and consequently the market's first reaction may not be a characteristic of the ability of the American currency to enter a new cycle of intense upward rally.
So I would consider the possibility of buying the European currency at new dip well below its previous low of 1,0175.
Author
Vasilis Tsaprounis
Independent Analyst
Vassilis Tsaprounis possesses over 25 years of professional experience in Capital Markets and especially in the foreign exchange market.
