EUR/USD: US Dollar is in the spotlight with 1.1500 at risk of collapsing

The single European currency suffered significant losses at the start of the week as the agreement between the United States and the European Union on trade tariffs appears to mainly favor the American side.

European officials apparently have a different perspective, claiming that a not-so-good deal is certainly better than no deal at all.

After a period of increased concern on this issue, some agreement has been reached, but several analysts are expressing their concerns about the impact on the eurozone economy, which, although in positive territory, remains fragile.

This development confirms my recent thoughts as reflected in a previous article in which I expressed doubts about the ability of the European currency to move well above the 1,20 level.

From what it seems, the issue of tariffs combined with a strong euro  could act as a explosive cocktail for the European zone's exports and the anemic growth could turn into a recession very quickly.

The latest developments seem to favor the American currency, which, combined with better interest rates, currently appears to be going on the counterattack.

Nevertheless, President Trump's enigmatic personality and his controversial policies remain a risk for the American currency, and the debt issue in particular remains on the agenda and is currently one of the most important thorns affecting the course of the American currency.

So although the conditions are there for a strong rally in the US currency, this is likely not to happen as investors remain extremely cautious and the recent significant correction was quite expected anyway.

Today's agenda, while not being indifferent, does not include any major macroeconomic news, with investors focusing their attention on tomorrow and until the end of the week, where several critical macroeconomic news are expected, from tomorrow's Fed decision on interest rates to new jobs on Friday.

The course of the exchange rate has partially confirmed several of my thoughts as expressed in previous articles, as I had given significant probability to the scenario that the European currency would show signs of fatigue and digest the levels with some good corrections before rising towards the 1.20 level.

For the rest, I remain on the wait-and-see position, waiting for a greater easing of the dollar's movement. In any case, I would prefer to buy the US currency at a new peak.