EUR/USD: The two-day rich agenda with EU GDP and US FOMC could change the bets

The single European currency eases slightly below the 1,07 level as investors take a wait-and-see approach ahead of a two-day very rich agenda of high-rating macroeconomic data that could shift bets and lift the exchange rate out of a tight trading range of the last few days.

Yesterday did not give any significant surprise and as expected the mild upward movement of the European currency showed signs of fatigue as without a very positive surprise from the Eurozone side the European currency beyond some very good reactions is difficult to develop a strong upward momentum.

The interest rate differential in favor of the US dollar which may widen in June if the European Central Bank decides on the first cut in key rates continues to favor the US currency and the possibility of the 1,06 level being tested again remains on the table.

Bets are currently concentrated on three rate cuts by European Central Bank, while from Fed's side the landscape is murkier with the prospect of the first rate cut to the end of the year with several chances on the table for September .

Today's data on the path of growth for European economy and the Fed meeting tomorrow are expected with great interest.

All interest will be focused on Fed Chairman Jerome Powell's comments as any change in monetary policy is unlikely.

A combination of disappointing data from the Eurozone along with aggressive rhetoric from President Powell is quite likely to give the US currency further room to move higher and challenge the 1,06 level.

I prefer to remain on hold but without move far from the thought of buying the European currency near the levels of 1,05.

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