(News Bulletin 247) – The Euro remained well oriented against the Dollar, in the wake of the European equity markets, the appetite for risk being reinforced at the start of 2023 by the positive interpretation, by the market, of the latest figures on the American job.
The message sent by this NFP (Federal Monthly Employment Report) is however twofold and ambivalent. Because on the one hand the market is witnessing with relief a deceleration in the rise in average hourly wages (+0.3% monthly), but the unemployment rate, expected to be stable at 3.7% of the active population, is came out sharply down to 3.5%, suggesting that the Fed has not yet gone far enough in the firmness of its monetary policy to cool the economic machine. 223,000 jobs were created in the last month of 2022, in the private sector (excluding agriculture), a figure higher than expected.
Regarding wages, which in this case focused the attention of operators on Friday, “the trend is slowing and could therefore reassure members of the Fed who fear that a tight job market will fuel the cycle of increases in wages and prices” which boosts inflation, explain BNP Paribas analysts quoted by AFP.
“Investors have […] chosen to see the glass half full on US employment figures. If the job market remains as solid as ever with sustained creations and even a drop in the unemployment rate, the market has preferred to focus on lowering wage pressures”, analyzes M Giudici.
However, US monetary policy will remain firm for a long time. The opportunity will be frank to judge this Tuesday, with the speech planned for the middle of the afternoon, by Jerome Powell, President of the Fed, on the occasion of a symposium organized by the Bank of Sweden, in Stockholm.
To follow as a priority on the macroeconomic agenda this Tuesday, the NFIB index of small American companies at 12:00 p.m.
At midday on the foreign exchange market, the Euro was trading against $1.0735 around.
KEY GRAPHIC ELEMENTS
The break of the 20-day moving average (in dark blue), which has served us up to now as a perfectly materialized trailing stop, requires cutting long positions, pending a relevant entry point. . However, no pronounced bearish reversal pattern has been identified. Conversely, only a crossing into a volatility high of $1.0750 would validate a bullish extension at this stage.
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
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