EUR/USD: The pair remain calm near 1.0650 on a poor agenda that only Lagarde's speech stands out

The single European currency is trading just above the 1,0650 level in the early trading hours of the new week as the indifferent agenda and the wait for President Lagarde's speech later in the afternoon keeps the exchange rate in a tight trading range with investors avoid taking big bets for now.

Friday did not provide any major surprises as after the temporary shock on the markets in the early hours of the morning with the Israeli attack on Iran, restraint prevailed and for now there are no signs of a major escalation as both sides seem willing to downplay the incident.

The risk aversion climate was significantly reduced, consequently the needs for dollar purchases was temporarily out of the game and the European currency found the opportunity to recover slightly.

In any case, the Middle East front remains hot and any time the calm could be followed by some unpleasant developments.

The geopolitical developments of the last few days have monopolized interest and temporarily put in the corner bets about the prospects on key interest rates cuts by Fed and ECB.

I remind that the hot inflation that remains on the table in the United States has shifted the bets for the first reduction in the key interest rates from Fed to the end of the year, while from the side of the European Central Bank, the biggest possibility remains for June.

As the interest rate differential remains in favor of the US currency and the possible widening is currently gathering the greater odds, something that remains the main catalyst in the market that could drive the US currency to higher prices.

Today's agenda is relatively poor and the only thing that stands out beyond President Lagarde speech is consumer confidence in the eurozone.

Without any major surprise the trading range for today will likely remain limited. The 1,06 level remains a strong support, but the chances of a breakdown are still good.

My thought to buy the Euro close to the 1,05 level remain, as the Euro's ability to react remains on the table with good fidelity as demonstrated once again in the past few days.