EUR/USD: ADP and NFP under traders' scrutiny!

Against the backdrop of the ambivalent message contained in the Fed's Minutes, the expectation of important figures on US employment pressures, and fears of a rebound in inflation in Germany and France in January 2023, the EUR/USD was trading within sight on Thursday, in close proximity to its 20-day moving average (in dark blue), whose direction is flattening.

The traditional minutes of the last FOMC meeting suggest that federal rates could remain high, without specifying the terminal rate, for an extended period of time, to combat "unacceptably high" inflation.

Inflation is still under the threat of strong tensions on the employment front, whose federal report for December is expected tomorrow, as the statistical highlight of this second part of the week. The consensus is for the unemployment rate to stabilise at 3.6% of the labour force and for 195,000 jobs to be created in the private sector (excluding agriculture), compared with the 264,000 created in November. A valuable foretaste is expected today at 14:15 (European time) with the publication of the results of the survey by the private human resources firm ADP.

In Europe, the rise in prices in France reached 6% over one year in December, against 6.3% in November, according to the provisional estimate published by INSEE on Wednesday. This slowdown in prices in France follows the announcement on Tuesday of a greater than expected slowdown in prices in Germany in December. The risk of a surge at the beginning of the year, before a more frank relaxation, remains real, according to the warnings of France's Minister of Economy and Finance.

Right now, the EUR/USD is trading at $1.0611.

KEY CHART ELEMENTS
The break of the 20-day moving average (in dark blue), which until now has served as a perfectly materialised trailing stop, requires us to cut our long positions, while waiting for a relevant entry point. However, no pronounced bearish reversal pattern has been identified.

MEDIUM-TERM FORECAST
Given the key chart factors we have mentioned, our medium-term view on the EUR/USD is neutral.

We will maintain this neutral view as long as the EURUSD is positioned between support at $1.0435 and resistance at $1.0746.