Vasilis Tsaprounis
Independent Analyst
The single European currency is currently defending the level of 1,06 but has not managed to move enough far away from it.
The exchange rate remains for a third day in a row in a narrow range between the 1, 06 - 1,0650 levels as the US currency's strong momentum fueled by hot US inflation last week is on pause.
Yesterday's agenda did not provide any surprises and the main interest for now is concentrated in Middle East developments as the possible response of Israel to Iran's attack remains on the table.
Heightened geopolitical concerns keep risk aversion in play which could further strengthen the US currency which is well known that traditionally function as a safe haven currency.
However, for now there is a calm as a big part of western world's diplomacy is trying to pressure Israel to show restraint in order to avoid a more general escalation with unpredictable consequences for stability and the world economy.
Today's agenda includes consumer inflation in the eurozone and the President's Lagarde speech. No major surprise is expected as it would be difficult for President Lagarde to change her rhetoric in just a few days.
The overall picture of the market remains the same with the US dollar maintaining a slight advantage for now mainly due to the prospect of a reduction in key interest rates by Ecb earlier than Fed.
However my thought to buy the Euro maybe above the 1,05 level remains on the table as I believe Euro's reactionary behaviors will come back into play.
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