EUR/USD: Euro's rebound well above 1.0850 may comes under challenge

The single European currency trades near the 1,0850 levels in the early morning hours on Thursday  on  consolidation mode.

The positive surprise from yesterday's eurozone growth announcement appears to be fading with the European currency struggling to maintain yesterday's upward momentum.

On the other hand, the better-than-expected data acted as a buffer and further declines in the European currency have been avoided for the time being.

Let's not forget that recently the concerns of eurozone officials about the course of the European economy, which may have avoided the risk of recession for the time being but the rate of recovery is not satisfactory, has been high on the agenda.

On the other side of the Atlantic, the corresponding announcement of the US  GDP  did not surprise positively, with the consequence that it in turn burdened the American currency.

In any case, the losses of the US currency so far can be considered controlled, as in view of today's announcements, but especially tomorrow's announcement on new jobs in the United States, investors kept bets of a limited size.

In today's fairly rich agenda, in addition to the path of consumer inflation in the eurozone, the Personal Consumption Expenditure index in the United States stands out one of  Fed's  favorite indicators as the main predictor of inflation tate.

Same picture on interest rates outlook , the chance that the Fed will cut rates by  25 basis points at the next meeting is almost 100% and there will need to be significant surprises till the meeting to change that outlook.

From European Central Bank side the mixed messages remain on the table despite yesterday's positive data  as several central bank officials have divergent views, with President Lagarde maintaining the same rhetoric that every decision is decided from meeting to meeting depending solely on macroeconomic data.

Geopolitical developments remain high on the agenda, with Middle East front  being the most important risk.

Τhe behavior of the market during yesterday partially confirmed my thoughts on the desire to buy the European currency but this happened much earlier than the desired levels.

In view of the stormy news today and tomorrow a wait-and-see attitude might be the best idea keeping the thought of buying the euro into some new sharp dip as reactionary behaviors have returned to the table with fairly good fidelity.