Anna 
The euro is hovering around 1.0850 levels in early trading this week, with the US Memorial Day holiday and a lackluster agenda in the Eurozone dampening the prospects for significant volatility.
Last week saw minimal excitement in the market, characterized by a narrow range of variation of approximately 70 points. The EUR/USD pair remained confined within the 1.08-1.09 range throughout the week.
Given the unchanged market conditions and investors’ reluctance to take substantial positions, the exchange rate is struggling to establish a clear direction at the moment.
Expectations regarding potential rate cuts by the Federal Reserve and the European Central Bank (ECB) persist, with the ECB likely to proceed with its first rate cut, possibly in June. Similarly, while the likelihood of a Fed rate cut in September slightly diminished last week, it remains relatively high.
Despite the US dollar’s advantage with higher interest rates, the euro is managing to defend the 1.08 level.
Today’s agenda is notably sparse, with the IFO Institute’s announcement on the climate and expectations for the German economy standing out as the only significant event. Any substantial deviation from expectations in this announcement could potentially increase volatility in the exchange rate.
Given the likelihood of a quiet trading day, the prudent approach is to refrain from making significant moves and adopt a wait-and-see stance.
