The single European currency for the second day in a row is in defensive mode trying to defend the level of 1,07. The temporary breakdown of the level during yesterday was not continued and the European currency has managed to stay above the critical level for now but without being able to continue the reactionary behavior.
The dust from the increased numbers in the US inflation data on Tuesday has not yet settled consistently the US currency despite yesterday’s pause remains in the foreground and the possibility of the 1.07 level being tested for a second time and retreat much below remains on the table.
Some statements from officials from both main central banks did not bring anything new on the table but the messages are mixed as it appears that some members do not fully agree with Fed’s President Jerome Powell and ECB’s President Cristine Lagarde.
In any case, bets continue to be stacked that any change in monetary policy is likely to happen sometime in the summer.
On today’s agenda in addition to the speech of President Lagarde stand out retail sales in the US that traditionally feed a large part of the american economy and a possibly increased prices may re-fuel a new attempt of the dollar to go higher.
While the US weekly jobless claims and manufacturing indices round out today’s agenda.
Overall the environment continues to be slightly favorable for the US currency and some disappointing US data will have to fall on the table for the sentiment to shift clearly in favor of the European currency.
In any case the European currency looks quite resilient and the possibility of very good correction behaviors coming back to the table remains good.
My thought to buy the Euro just above the 1,06 level remains.
