EUR/USD: Euro remains in the spotlight on the threshold of 1.0500 but further rise is a challenge
|The single European currency remains in the spotlight for the 5th consecutive day, maintaining a mild upward trend, having moved well away from Monday's opening, where in the wake of President Trump's imposition of tariffs, the exchange rate opened with a gap in favor of the US dollar.
The resilience shown by the European currency lately has confirmed my thoughts and desire to position myself in favor of the European currency after some dips, although I have failed to find the right entry point.
At the same time, the assessment that the pattern of recent weeks will remain in play for some time has also been confirmed as the exchange rate continues to remain in a range of fluctuation between the recent lows at the level of 1,0175 and on the other side just above the levels of 1,05.
The course of the exchange rate, beyond the broader macroeconomic picture of the eurozone and the United States, is expected to be significantly influenced by President Trump's rhetoric and his actions.
We remain in a foggy environment regarding the final decisions on whether or not to impose tariffs, the final percentage, and the total number of countries on which they will be imposed.
So the investors remain cautious and avoid big bets, and although the US currency has many reasons to maintain an upward rally, this has not in this week, with the European currency maintains a mild positive momentum.
This mild momentum could quickly be called into question and there could be significant fatigue in the European currency as I maintain the assessment that although the European currency has shown good resilience, it may not be time yet to return to a level close to 1.08.
On today's agenda, Eurozone's growth data and the retail sales in the United States stand out, critical macroeconomic news, which, if they surprise, could give some further impetus to the European currency or, conversely, the weekly rise could be accompanied by a good correction in favor of the US dollar.
My thoughts on positioning in favor of the European currency are now distant as we have moved far away from the recent lows, consequently I am leaning towards the idea of buying the American currency in the event that there is a peak near the levels of 1,07.
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