EUR/USD: With signs of fatigue the European currency remains below the 1.0900 level

The single European currency is trading just below 1,09 levels in early morning trading on Thursday, showing signs of fatigue after yesterday's strong rally.

The announcement of US consumer inflation slightly below estimates acted as a trigger and the losses of the US currency in recent days were extended.

Lower inflation in the United States significantly increased bets on the first rate cut by Fed in September as well as the prospect that it will not be the only cut until the end of the year.

At the same time, yields on US government debt securities continued to decline, which affected the US currency.

The US currency was also burdened by the positive climate in the international stock markets as the improvement in interest rate reduction prospects improved risk sentiment and limited dollar needs, which acts as a safe haven currency.

Today's agenda without any high grade news is quite interesting with the weekly US jobless claims, Housing Starts data and industrial production.

The US dollar has been under pressures  in recent days and has lost significant ground as a result of which the European currency has come far way from last weeks lows of 1,06.

Several macroeconomic data released recently weighed on the US currency while the decline in US Treasury yields also acted as one of the key catalysts.

Τhe prospect of the euro recapturing levels above 1,10 and stay above that has improved,  but I maintain the same thinking with significant doubts about the euro's ability to do so relatively quickly as despite recent developments the US dollar continues to offer better interest rates compared to the Euro.

As I missed the opportunity to buy the European currency I prefer to stay on hold and consider the prospect of buying the US dollar on a possible sharp move above the 1,10 level.