EUR/USD: Euro on defense mode trades near 1.1700

The single European currency is falling in the early hours of Wednesday, having moved well away from yesterday's highs of 1.18 and is likely to challenge 1.17 level very soon.

The disappointment from yesterday's unemployment data in the United States created pressure on the American currency as concerns about the course of US economy seem to be returning to the fore with the unemployment rate being announced much worse than expected.

Despite the disappointing data, there has been no major shift in bets for the next Fed meeting, where the probability of another interest rate cut is currently well below 50%.

The unemployment figures in the United States may have been worrying, but the return to pressures for the European currency today is a reminder that the European economy has its own questions and an exchange rate well above 1.20 will be a particular challenge for the fragile European economy.

The recent interest rates cut by the Fed and yesterday's data may have played their part in the recent rise of the European currency, but the exchange rate remains at the familiar levels of the last 6 months and some critical levels have not yet been broken.

I continue to give considerable chances to the scenario that this picture will be maintained for some time and I am currently unable to discern any strong direction.

Today's agenda, although not indifferent, does not contain any high-profile macroeconomic news, with the result that investors' interest will be limited to some speeches by Fed officials, but mainly on tomorrow's agenda, which includes the meeting of the European Central Bank, the speech by President Christine Lagarde, and the consumer price inflation index in the United States.

I remain on hold, maintaining the idea of buying the US currency at the threshold of 1,20.