The euro is up slightly, one step away from the 1.1100 level, ahead of key US employment data due tomorrow

The single European currency is trying to approach the 1.11 level after having developed a very slight bullish momentum following yesterday’s announcements, where some preliminary data on the US labor sector disappointed.

Despite the moderate reaction of the European currency, the overall market outlook shows no significant changes and investors remain extremely cautious awaiting tomorrow’s announcement on new jobs outside the agricultural sector and the level of unemployment in the United States, which should determine the Fed’s decisions on September 18.

I recall that the contraction of the US labor sector acted as one of the catalysts that weighed on the US currency and pushed the euro to significantly higher prices two weeks ago.

Let us not forget that in several statements the Fed Chairman has sent the message that a further cooling of the labor sector is not desirable and that he could use interest rate cuts as a weapon to stop the rise in the unemployment rate and by extension prevent a possible recession in the US economy.

The possibility of a 50 basis point increase is not the main scenario and if it happens it will be a shock event that will have a very negative impact on the dollar, but it is something I would not adopt, especially if Friday does not disappoint.

Today’s agenda includes employment data from ADP – the largest payroll provider in the United States – which usually acts as a harbinger of Friday’s employment data and is closely watched by the market.

Today’s busy agenda is rounded off by Eurozone Retail Sales and the survey on the evolution of the US services sector.

The likely scenario for today is that the exchange rate will remain near the 1.1050 – 1.1100 level with some minor extensions on either side of the levels.