The single European currency is trading above the 1,08 level trying to balance after the opening  of the new week  where it cames under question after the result of the French elections where the Left Party creating the  surprise and collected largest percentages.

The first movements of the exchange rate in Asia started with a small gap of about 40 basis points as anxiety was high in the markets as it is still too early for anyone to be able to decipher the consequences of the results of the French election.

After the initial challenge , the exhange rate is showing signs of calm  with the euro recovering slightly and trading above the 1.08 level with the environment however quite cloudy and any big bets at the moment seem to be extremely risky.

The European currency was favored on Friday as mixed results from the US jobs sector kept the possibility of a faster cut in key interest rates from the Fed on the table.

I remain skeptical of the European currency’s ability to easily break through the 1,10 level and stay above it in the near term as the interest rate differential continues to clearly favor the US dollar and any local  highs in the Euro are expected to boost the interest for  buying the US currency.

Today’s agenda is relatively poor with no major macroeconomic announcements or statements from Fed and ECB officials.

The market’s difficulty in deciphering the results of the French election is expected to weigh on the European currency and increase the cloudy environment with investors likely to avoid taking large bets.

There are no significant changes in my thinking and now that the level of 1,06 which I wanted to buy the European currency has moved away ,I  remain on hold and will consider buying the American currency at the levels of 1,10 and above.