EUR/USD: Calm agenda with small gains for dollar, with the 1.0700 likely to be come under challenge

The single european curency continues to be under mild pressure with the 1,07 level the next challenge for the exchange rate on a relatively quiet economic agenda with no major macroeconomic announcements.

As expected, yesterday did not provide any surprises and the exchange rate remained in an extremely limited range of fluctuation of only 20 basis points near the levels of 1,0750.

Τhe pair remains extremely ''heavy'' as traders avoid taking big bets waiting for some fresh catalyst to give some direction to the exchange rate.

The prospects of a reduction in the key interest rates by Fed  and Ecb continue to monopolize interest and remain one of the main factors affecting the exchange rate.

The interest rate differential in favor of the US dollar and the prospect of that differential widening is likely to give the US dollar room for further gains.

Disappointing US jobs data on last Friday acted as a drag on the US currency helping the Euro temporarily approach the 1,08 level but as the dust has settled the US currency is likely to make another attempt to test the crucial level of 1,06 in the near future.

And today's agenda is relatively poor with the only standout being the weekly US jobless claims as well as some statements from Fed and Ecb officials.

Without any big surprise the exchange rate  is expected to remain in a limited range of variation with maybe some chance that the 1,07 level will come under question.