EUR/USD: USD's mildly bullish momentum may come back to the fore

The single European currency remains firmly above the 1,0750 level after the significant reaction during the day yesterday, the Euro has now rebounded almost 150 basis points from Wednesday's lows of 1,0635.

The behavior of the market during yesterday reminded once again something that I have mentioned repeatedly in previous articles the European currency is not available to suffer significant losses without being able to defend and react strongly.

After all, after a retreat of almost 500 basis points from the highs of 1,11 a major correction remained in play with significant probability.

The overall picture of the market shows no significant differences and the correction was something to be expected without needing a major catalyst for it.

The final acceptance by the House of Representatives to increase the debt in the United States brought some calm back to the International stock markets but really as I mentioned yesterday nothing else could happen.

The return of prices on the stock exchanges to better prices certainly did not favor the US dollar which traditionally functions as a safe haven currency.

The path of the exchange rate continues to be very closely linked to the outlook of the two main central banks regarding Key interest rates.

Although yesterday's announcement on the course of Consumer Inflation in the Eurozone showed significant signs of decompression President Christine Lagarde maintained an aggressive tone which keeps open on the agenda that beyond the next two increases in key interest rates by the ECB there may be further.

I remind that the aggressive rhetoric of the European Central Bank had indeed been sufficiently discounted, with the result that the upward momentum of the euro was put into strong doubt, but on the other hand, its existence and the bringing back to the fore by officials proved capable of preventing the collapse of the euro and a strong reaction again came to the fore.

Now all the interest is focused later in the day on the announcement of new jobs in the US  which is traditionally one of the macroeconomic news that creates intense volatility.

USD's mildly bullish momentum may come back to the fore if data surprises positively.