EUR/USD: US employment report at the end of a busy week

(News Bulletin 247) – This article, with open access, is produced by the stock market analysis and strategy research team at News Bulletin 247. To ensure you don’t miss any opportunities, consult all the analyzes and discover our portfolios by accessing our Privileges area.

The Dollar lost a few pips against the Euro since the outcome of the Fed’s last FOMC which clearly postponed the start of the downward trend in the Fed Funds until later. The Euro, for its part, did not manage to free itself from its 20-day moving average, against a backdrop of a slight contraction in risk appetite after the disappointment caused by the quarterly copy of BNP-Paribas, which has contaminated the entire banking sector in Europe.

Forex traders had to digest as best they could the comments of Fed President Jerome Powell. The central banker has clearly tempered the enthusiasm of the market, which before this meeting was counting on rate cuts from March. From 60%, the probability given by investors to such a movement has now fallen to 35%, according to the CME Group’s FedWatch tool.

It must be said that the latest statistic proves the head of the Fed right. Manufacturing activity in the United States recovered more than expected in January, shows the monthly survey from the Institute for Supply Management (ISM) published Thursday. The ISM manufacturing index came out at 49.1 points where the market expected 47 points, and after a revised figure of 47.1 for the month of December. However, it remains below 50, the threshold below which activity contracts.

Forex traders will be able to look forward to the home stretch of a very busy week with the publication of the NFP (Non Farm Payrolls) report at 2:30 p.m. Here are the corresponding consensuses for this federal employment report, closely followed by the Fed:

Unemployment rate: slight increase to 3.8% of the active population; Average hourly wage: +0.3% compared to +0.4% in December; Job creation, private sector excluding agriculture: 187,000.

Also to follow, at 4:00 p.m., the American consumer confidence index (U-Mich) in revised data.

At midday on the foreign exchange market, the Euro was trading against $1.0880 approximately.

KEY GRAPHIC ELEMENTS

Interestingly technical fact, the 20-day moving average (in dark blue, bearish), is currently breaking its 50-day moving average (in orange, horizontal), i.e. a first contact since November 13. The graphic and technical situation is tensing under this trend line. However, the angle of attack is not very important.

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 1.0762 USD and resistance at 1.0940 USD.

DAILY DATA CHART