The single European currency is holding steady around the mid of 1,07-1,08 levels as it pared Friday’s sharp losses and managed to successfully defend the 1,07 level .
The single currency closed last week higher but lost the strong bullish momentum that helped it climb to post weeks highs in the 1.0930.
The return of the stock markets to an environment of pressure limited the upward momentum of the European currency as it again led to the need to buy dollars which traditionally functions as a safe haven currency.
Friday’s downtrend was interrupted at the 1,0720 level which mentioned in the previous article as the lower range on a potential swing for the day.
The European currency reacted once again by limiting the losses, reminding again the excellent ability to react after some pressures.
Today’s agenda is extremely poor and was limited to the announcement of the IFO index on economic activity in the German economy where it showed small signs of improvement , while from the side of the US economy there is nothing to announce.
With this data, a quiet trading day is the most likely scenario and only a new bearish run in international stock markets would be a catalyst to further strengthen the US dollar.
As the aggressive rhetoric of the European Central Bank remains in the foreground while the Fed has narrowed its own outlook, I believe that the best strategy is Euro long positions on new sharp dips as the reaction remains in play with excellent fidelity.