EUR/USD: Bovers will dissect the NFP like never before

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Bover feverly awaits the publication, at 2:30 p.m. this Friday, from the federal private employment health report in August. This NFP (for non-Farm Payrolls), traditionally very followed, will be all the more this time since the independence of the Fed is more than ever in danger.

“The monthly report on American employment is still an event to follow, but after the dismissal of the BLS manager by Donal Trump and the proximity of the Fed meeting, it will crystallize the attention of the markets,” summarizes Alexandre Baradez, responsible for the market analysis at IG France.

Economists interviewed expect a slight increase in unemployment on an average of 4.3% of the active population, and 74,000 net of positions. Strong differences in consensus could have consequences both on Treasuries 10 years and the estimated trajectory of federal rates.

“The Fed is thus in an uncomfortable situation. Its president, Jerome Powell, also judges that inflation linked to customs duties is temporary, but the high underlying inflation (3.1% in July) does not suggest any softening of monetary policy,” said Swiss Life AM economists.

In any case, the probabilities of decrease of 25 basic points for the remuneration of the Fed Funds at the end of the FOMC this month of September is however almost acquired, at 99.4% probability according to the Fedwatch tool proposed by the CMEGRroup.

“In parallel, the political pressure to lower the rates is immense. The low economic growth associated with the deterioration on the employment front could also justify a slightly less restrictive monetary policy. Low in July, the growth in employment has also been clearly revised downwards for the previous months. The unemployment rate is certainly stable compared to last year, at 4.2%, but many other indicators testify to the growing difficulty Employment.

Before this NFP, throughout this second part of the week, various indicators on employment have been brought to the attention of the markets, and they stand out in all the relative good quality, but “a little more degraded than previous publications, be it JOLTS (available jobs), ADP (private employment), unemployment registrations or the Challenger report on layoffs.”

Bover also monitors the OAT10 years, which at 3.47%, continues its reflux. It surreptitily exceeded 3.60% this week, while the end of the Bayrou government is looming, and with it the end of a 2026 austerity budget, marked by 44 billion euros in savings.

At midday on the foreign exchange market, the euro was treated against $ 1,1690 approximately.

Key graphics elements

The pair of Euro / dollar currencies is in the marked ascending phase, background, above an oblique right that makes sense. We have represented this linear level of graphic support in black. In the immediate future, we will keep an eye attentive to the relative positioning of the mobile averages at 20 (in dark blue) and 50 days (in orange) to optimize the entry points.

Medium term

In view of the key graphic factors that we have mentioned, our opinion is neutral in the medium term on Euro dollar parity (Eurusd).

We will keep this neutral opinion as long as the EURO Dollar (EURUSD) prices are positioned between the USD 1,1608 support and the resistance to 1,1835 USD.

Daily data graphics