EUR/USD: FOMC Wednesday and Board of Governors Thursday

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The highly anticipated monthly federal employment report will ultimately have caused very little difference in the Euro/Dollar currency pair, as its content, a priori worrying, must be put into perspective. Explanations.

This statistic must indeed be restated for several elements. “Much of the employment growth this month can be attributed to the end of the UAW and Hollywood strikes,” notes Bank of America. Capital Economics points out that the end of these strikes added 47,000 positions and that, in addition, the public sector created 49,000 jobs in November.

Concerning the NFP: First of all, the unemployment rate, expected to be stable at 3.9% of the active population, experienced a downward “gap”, falling to 3.7% of the active population. Job creation, which is closely monitored, came out above expectations in the immediate vicinity of 200,000 new units, against a target of 184,000, and a month of October at 150,000. Finally, no truce, quite the contrary , on the dynamics of average hourly wages, up 0.4%.

“The employee survey surprises with 199K salaried job creations in November compared to 183K expected and the unemployment rate has fallen to 3.7%. The layoffs announced over the month vary little and weekly unemployment registrations are stagnating at a low level. The increase wages firmed up at +0.4% in November, i.e. a stable rate of 4% per year.” explains Jeanne Asseraf-Bitton, Head of Research and Strategy at BFT IM.

This week, currency traders will naturally have their eyes on the ECB and the Fed who will complete their last monetary meeting of the year. If a status quo on rates is widely expected, currency traders will be attentive to the tone used, more or less muscular, more or less restrictive, to try to guess when the first rate cuts could be considered.

“Everyone would like them to give indications on the direction of monetary policy in 2024. It’s too early,” according to Christopher Dembik, investment strategy advisor at Pictet AM. “In the best case scenario, they should welcome the drop in inflation which makes it possible to envisage a possible pivot next year. We will therefore have to be patient to know when the first rate cuts will take place and above all how extensive will the monetary easing process be?

No major statistical figures are on the agenda today. Tomorrow, the agenda will suddenly expand with the German ZEW and the American CPI.

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

KEY GRAPHIC ELEMENTS

Since November 29, the Euro/Dollar has almost completely retraced the gains made from November 14 to 28, but with no indication of an imminent restart. The opinion will remain neutral above the low points of the candle in marubozu blank of November 14.

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