(News Bulletin 247) – The foreign exchange market betrayed a gradual loss of risk appetite as the US federal employment figures approached (NFP report at 2:30 p.m.), fears of a still long continuation of the fight against inflation having been fueled by the content of the Fed Minutes earlier in the week.
The opportunity is clear to gauge the degrees of tension on the job market, tensions themselves generating inflation… However, the foretaste offered yesterday by the results of the ADP survey refreshed the atmosphere. The private human resources firm has just highlighted in its publication job creations in the private sector well above expectations (235,000, against a target of 152,000). See you at 2:30 p.m. for the publication of the NFP (No Farm Payrolls). The unemployment rate is expected to be stable at 3.7% of the active population and the wage increase at +0.4% (average hourly wages on a monthly basis).
Benchmarks on employment which take on a particular color after the publication of the Minutes, the traditional written report of the debates of the last FOMC of the Fed. Document which suggests that federal rates could remain high, without specifying the terminal rate, for an extended period, to fight against “unacceptably high” inflation. It is precisely a question of employment and wages: “nominal wage growth has remained high and maintained above the rate deemed to be in line with the FOMC’s inflation target of 2%. Average hourly wage gains have increased by 5.1% in the 12 months ending in November, close to the pace recorded in the hourly compensation cost index in the private sector in the 12 months ending in September.
The Euro, a barometer of risk appetite, is struggling to increase its gains, as questions about the duration of the US inflationary wave multiply. “It is premature to claim victory in the fight against rising prices,” said Gita Gopinath, deputy managing director of the International Monetary Fund (IMF), in an interview with the Financial Times.
At midday on the foreign exchange market, the Euro was trading against $1.0515 around.
KEY GRAPHIC ELEMENTS
The break of the 20-day moving average (in dark blue), which has served us so far as a trailing stop (trail stop) perfectly materialized, imposes to cut the buying positions, while waiting for a relevant entry point. However, no pronounced bearish reversal pattern has been identified.
MEDIUM TERM FORECAST
In view of the key graphic factors that we have mentioned, our opinion is neutral in the medium term on the Euro Dollar (EURUSD).
We will maintain this neutral opinion as long as the Euro Dollar (EURUSD) parity prices are positioned between the support at 1.0435 USD and the resistance at 1.0746 USD.
CHART IN DAILY DATA
©2023 News Bulletin 247
I have over 8 years of experience working in the news industry. I have worked as a reporter, editor, and now managing editor at 247 News Agency. I am responsible for the day-to-day operations of the news website and overseeing all of the content that is published. I also write a column for the website, covering mostly market news.
