EUR/USD: The pair remains ''heavy'' near 1.0500 level looking for direction on ECB day
The single European currency remains close to 1,05 level in a narrow range of fluctuation pending the meeting of the European Central Bank where a 25 basis point cut in key interest rates is the main scenario.
Without ruling out surprises, interest is expected to focus on the statements of President Lagarde, where any fresh messages about the next moves by the European Central Bank could change the bets, significantly increasing volatility and giving some direction to the exchange rate.
Yesterday did not bring any surprises, with inflation data in the United States dominating the interest, but as the announcement was within expectations, the exchange rate did not move away from the 1.05 level, with investors maintaining a wait-and-see attitude in view of today's crucial meeting.
The general market picture remains the same with the main catalysts that burden the European currency's effort to develop a positive momentum remaining on the table.
Geopolitical risk, potential political instability on the European continent and concerns about the European economy remain high on investors' agendas.
Today's very rich agenda is certainly dominated by the European Central Bank meeting, but producer inflation data and weekly jobless claims in the United States are always watched with interest by investors.
In view of significant upcoming developments, obviously a wait-and-see attitude remains a good idea, but i still keeping in mind the idea of buying the European currency in a sharp dip, probably near the recent lows of 1.0330, as I believe that reactions behaviors will remain on the table.
Author
Vasilis Tsaprounis
Independent Analyst
Vassilis Tsaprounis possesses over 25 years of professional experience in Capital Markets and especially in the foreign exchange market.
