EUR/USD: The euro on defense mode, but for how long?

Vasilis Tsaprounis Independent Analyst

Once again the pair confirmed the expectations and after a daily drop below 1,04 on Thursday it reacted strongly with gains of around 100 basis points approaching 1,05 again.

It seems that " buy on dips " strategies, turned out to be one of the most appropriate as we noted in yesterday's report.

The key macroeconomic picture is unchanged. The US core Personal Consumption Expenditure (PCE) Price Index came in as expected, falling slightly to 4.7 from 4.9 in the previous month, with no surprises. But it is a small indication that the latest interest rate hikes by Fed may have the first positive impact in terms of containing inflation.

Markets now seem to have '' digested '' that the Fed-ECB gap will remain as the ECB appears to be reacting very cosernative to the prospect of a rate hike, even as euro zone inflation stabilizes above 8%.

The pair is looking to find direction and through the technical picture of the charts, but from which we have mixed conclusions.

For this reason and in view of the absence of important events throughout the day we will prefer to maintain neutral view by repeating yesterday's idea for '' buying in dips " strategies for the Euro.

The view that the critical 1,0350-70 support level is now likely to be broken remains.

Author

Vasilis Tsaprounis

Independent Analyst

Vassilis Tsaprounis possesses over 25 years of professional experience in Capital Markets and especially in the foreign exchange market.

EUR/USD looks sidelined around 1.1850

EUR/USD remains on the back foot, extending its bearish tone and sliding towards the 1.1850 area to print fresh daily lows on Monday. The move lower comes as the US Dollar gathers modest traction, with thin liquidity and subdued volatility amplifying price swings amid the US market holiday.

GBP/USD flirts with daily lows near 1.3630

GBP/USD has quickly given back Friday’s solid gains, turning lower at the start of the week and drifting back towards the 1.3630 area. The focus now shifts squarely to Tuesday’s UK labour market report, which is likely to keep the quid firmly in the spotlight and could set the tone for Cable’s next move.

Gold battle around $5,000 continues

Gold is giving back part of Friday’s sharp rebound, deflating below the key $5,000 mark per troy ounce as the new week gets underway. Modest gains in the US Dollar are keeping the metal in check, while thin trading conditions, due to the Presidents Day holiday in the US, are adding to the choppy and hesitant tone across markets.

Bitcoin consolidates as on-chain data show mixed signals

Bitcoin price has consolidated between $65,700 and $72,000 over the past nine days, with no clear directional bias. US-listed spot ETFs recorded a $359.91 million weekly outflow, marking the fourth consecutive week of withdrawals.

The week ahead: Key inflation readings and why the AI trade could be overdone

It is likely to be a quiet start to the week, with US markets closed on Monday for Presidents Day. European markets are higher across the board and gold is clinging to the $5,000 level after the tamer than expected CPI report in the US reduced haven flows to precious metals.

XRP steadies in narrow range as fund inflows, futures interest rise

Ripple is trading in a narrow range between $1.45 (immediate support) and $1.50 (resistance) at the time of writing on Monday. The remittance token extended its recovery last week, peaking at $1.67 on Sunday from the weekly open at $1.43.