The exchange rate continues to be extremely ”heavy” and remain above the 1,08 level as microeconomic news continues to come close to estimates, no major surprise is currently on the table and investors remain cautious.
The behavior of the market in recent days has created favorable conditions for scalping traders as the small fluctuation range favors this trading philosophy.
However, as the time frame of this behavior increases and the exchange rate remains compressed in a limited range of variation, the risks of a large move increase where price relaxation to one side or the other is expected to simultaneously trigger stop loss orders.
Τhe question is what will be the trigger that will manage to release the exchange rate from the limited range of fluctuation and create the conditions for a specific strong direction.
Today and tomorrow and before the closing of the week include quite a rich agenda with inflation price indices in Germany, Eurozone and US.
As the exchange rate remains extremely sensitive to anything related to the prospect of key interest rate cuts by the two main Central Banks is understandably that inflationary figures on both sides of the Atlantic if they surprise are capable of creating great volatility and the days of calm will end.
Οn today’s agenda stands out the Personal Consumption Expenditure price index in US which is Fed’s preferred indicator on which it tracks the outlook for the path of inflation and several times is a reliable harbinger of possible change in rhetoric from Fed’s officials.
My thinking remains the same expecting a significant dip in the Euro on the possibility to open buy positions.
