EUR/USD: The pair remain trapped to 1.0500 – 1.0600 levels as investors avoid big bets

Nothing new in the game as the European currency maintains levels above 1,05, avoiding further losses but at the same time unable to develop an upward momentum at the moment.

Yesterday's very poor agenda brought nothing new to the table with the exchange rate being limited to a narrow range of fluctuation.

As we approach the end of the year, the prospects of interest rate cuts are high on the agenda, with interest focused on  Fed's decision next week, with the odds relatively evenly split.

Signs of fatigue in the US currency remain on the table, giving the European currency the opportunity to remain well above the 1.05 level, trying to maintain a mild upward momentum and move even further away from its recent lows of 1.0330.

Nevertheless, the critical catalysts that had burdened the European currency recently, leading it to significant losses, remain on the table.

Political uncertainty in the eurozone is widening as the French government fell and, combined with the political situation in Germany, is creating intense concerns.

At the same time, geopolitical risks have not receded while the course of the European economy continues to be troubling.

The exchange rate has been compressed for several days at these levels and as we approach the central bank decisions it will be difficult to see any significant change.

Αnd today's agenda is relatively poor with the only highlight being the inflation rate for the German economy which did not show any surprises.

In such an environment, the continuation of the European currency's reaction by maintaining its upward momentum for a long period of time remains  challenge.

I prefer to remain on a wait-and-see basis and would like a sharp decline near the recent lows at 1.0330 to buy the European currency.