EUR/USD: Appointment at 2:30 p.m. for the NFP

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The forces were rebalancing on the Euro/Dollar currency pair as the statistical high point of the week approached, which constituted for currency traders the NFP (Non Farm Payrolls) report on private employment in the United States. The challenge is to be able to accurately measure, following very reassuring figures on inflation, to what extent tensions on employment are decreasing across the Atlantic.

For the moment, the various indicators on employment which punctuated the week, first and foremost the survey by the private firm ADP and new job offers (JOLTS) have sent satisfactory signals. Note, however, that weekly registrations for unemployment benefits, published yesterday, still remain close to the threshold of 200,000 units. Investors therefore want certainty, to be able to refine their estimated timetable for lowering federal rates. However, as Alexandre Baradez points out for IG France, “nothing indicates in the declarations of members of the Fed or the ECB that a rate cut will take place in the first quarter.”

On the agenda this Friday, to follow in priority the Non Farm Payrolls report for the month of November. The consensus expects the unemployment rate to stabilize at 3.9% of the active population, job creation to increase by around 185,000, and an increase in the average hourly wage of 0.3%. A solid report, therefore, if the targets were to be reached.

At midday on the foreign exchange market, the Euro was trading against $1.0775 approximately.

KEY GRAPHIC ELEMENTS

At this stage of the spot’s decline, the Euro has moved very significantly closer to its 50-day moving average (in orange) against the Dollar, and its RSI oscillatory to its oversold zone. A bullish reaction is currently anticipated, particularly given the structure of the December 7 candle.

MEDIUM TERM FORECAST

Considering the key graphical factors that we have mentioned, our opinion is positive in the medium term on the Euro Dollar (EURUSD).

Our entry point is at 1.0776 USD. The price target for our bullish scenario is $1.0955. To preserve the invested capital, we advise you to position a protective stop at 1.0692 USD.

The expected profitability of this Forex strategy is 179 pips and the risk of loss is 84 pips.

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