EUR/USD: The ADP survey, a preview before the NFP report

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The Euro continued its consolidation movement against the Dollar, the day after comments deemed accommodating on the part of Isabel Schnabel, a member of the Executive Board of the ECB yet judged as a hawk (an intransigent central banker in the fight against inflation for to summarize). She told Reuters that with inflation falling a further hike in the central bank’s key rates was now “rather unlikely”.

As a reminder, currency traders learned last week of the first estimates of consumer prices for the month of November in the Euro Zone. And surprise, the dynamic of slowing inflation is even greater than expected. Excluding food, energy, alcohol and tobacco (elements considered volatile), prices increased at an annualized rate of 3.6% in November, compared to a target of 3.9% and a month of October of 4.2%! A very significant slowdown which should bring a little flexibility to the ECB’s monetary policy.

“The larger-than-expected drop in inflation in November means it is becoming increasingly untenable for “European Central Bank (ECB) members” to pretend they are not even considering cutting rates “, explains Capital Economics. “We now expect a first drop for next June, rather than for September,” adds the think tank. All products combined, inflation is reduced to 2.4% according to this first estimate from EuroStat. The next publication covering all data for the month of November 2023 is scheduled for December 19, 2023.

The Dollar, for its part, is no longer able to gain the advantage, with the confirmation of a massive decline in 10-year Treasuries, a decline fueled just yesterday by new job offers (JOLTS). Job openings in the United States (JOLTS) fell in October to their lowest since March 2021, according to data published at 4 p.m. by the American Bureau of Statistics. Job openings thus increased to 8.7 million units, compared to a consensus compiled by the Wall Street Journal at 9.4 million units. Operators will be able to deal with other previews on employment by Friday and the NFP with job cuts (Challenger), registrations for unemployment benefits and the investigation by the private HR firm ADP.

To be continued, the results of the survey by the human resources firm ADP at 2:15 p.m. Any confirmation of a decline in tensions on the employment front would constitute an additional source of relief for the Fed.

At midday on the foreign exchange market, the Euro was trading against $1.0790 approximately.

KEY GRAPHIC ELEMENTS

After a bullish runaway characterized by the candle in marubozu school on November 14, followed by a very short consolidation and an early bullish extension, a technical adjustment is underway, an adjustment catalyzed by the statistical publications of Thursday, November 30. The view is neutral in close proximity to the 20-day moving average (dark blue).

MEDIUM TERM FORECAST

Considering the key graphical 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 Euro Dollar (EURUSD) prices are positioned between support at 1.0693 USD and resistance at 1.1012 USD.

DAILY DATA CHART