EUR/USD: Under a technical ceiling at $1.0750

The euro/dollar exchange rate remained close to its December highs, with risk appetite playing in favour of the single currency, following Friday's release of a sharp and surprising slowdown in wage growth momentum across the Atlantic. The NFP (Non Farm Payrolls) showed a monthly increase of 0.2% in December in average hourly wages (private sector, excluding agriculture). "The trend is towards a slowdown and could therefore reassure Fed members who fear that a tight labour market could fuel the cycle of wage and price rises" which is boosting inflation, explain BNP Paribas analysts quoted by AFP.

No negative signals for the Euro this morning, on the statistical side, with German industrial production and the unemployment rate in the Eurozone in line with expectations. The Sentix investor confidence index, while still largely in negative territory, even managed to beat the consensus, coming out 3.6 points higher at -17.4. "Hopes of avoiding a severe recession in Germany are taking on more substance," read the comments accompanying the publication by the Institute for Behavioural Finance.

To be followed by the volume of consumer credit in the US at 21:00 (European time).

Right now, the pair is trading at $1.0744.

KEY CHART ELEMENTS
The break of the 20-day moving average (in dark blue), which until now had served as a perfectly materialised trailing stop, means that long positions must be cut, while waiting for a relevant entry point. However, no pronounced bearish reversal pattern has been identified. Conversely, only a high volatility breach of $1.0750 would validate a bullish extension at this stage.

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 EUR/USD is positioned between support at $1.0435 and resistance at $1.0746.