EUR/USD: The Euro maintains profits but may its difficult to gain further
The single European currency retreats slightly from the 1,08 threshold it was at after yesterday's significant gains.
ฮฅesterday had a significant percentage of surprise as despite the disappointing data on the development path of the European economy the single European currency developed a slightly upward momentum which led it to the threshold of 1.08.
ฮs a result, the euro is headed for its first weekly gains after four consecutive weeks of losses.
ฮs I mentioned in the previous article my strategy was against the US currency but I was waiting for lower levels to position myself in favor of the Euro.ย
Although as I have repeatedly mentioned the reactions of the European currency are strong and often comes in the game with great fidelity,ย yesterday's reaction surprised me quite a bit, especially after the disappointing news on the growth of the Eurozone.
With no major catalyst, as an explanation is that the exchange rate returning to more neutral levels after the US currency's significant gains over the past 4 weeks ahead of major developments next week with rates hike decisions from Fed & Ecb.ย
Apparently a number of investors who were holding positions in favor of the US currency in recent weeks liquidated some of them in anticipation of next week by reducing open bets.
The economic agenda remains particularly poor today. With no major announcements, interest is limited to some speeches from European Central Bank officials, and a continuation of the strong rise in the European currency would be a continued surprise.
For this reason I maintain a waiting attitude, I would like to position myself in favor of the euro but not at these levels.
For the European currency to lose some of yesterday's gains keeps increased chances for the rest of the day.
Author
Vasilis Tsaprounis
Independent Analyst
Vassilis Tsaprounis possesses over 25 years of professional experience in Capital Markets and especially in the foreign exchange market.
