EUR/USD: ADP job agency releases thoughts ahead of this Friday's NFP report

The euro continues its consolidation movement against the dollar, the day after comments deemed accommodating on the part of Isabel Schnabel, a member of the Executive Board of the ECB yet judged as a hawk (an intransigent central banker in the fight against inflation for to summarise). She told Reuters that with inflation falling a further hike in the central bank's key rates was now "rather unlikely".

As a reminder, currency traders learned last week of the first estimates of consumer prices for the month of November in the Eurozone. And surprise, the dynamic of slowing inflation is even greater than expected. Excluding food, energy, alcohol and tobacco (elements considered volatile), prices increased at an annualised rate of 3.7% in November, compared to a target of 4% and a month of October of 4.3%! A very significant slowdown which should bring a little flexibility to the ECB's monetary policy.

"The larger-than-expected drop in inflation in November means it is becoming increasingly untenable for "European Central Bank (ECB) members" to pretend they are not even considering cutting rates ", explains Capital Economics. "We now expect a first drop for next June, rather than for September," adds the think tank. All products combined, inflation is reduced to 2.3% according to this first estimate from EuroStat. The next publication covering all data for November 2023 is scheduled for 19 December.

The dollar is no longer able to gain the advantage, with the confirmation of a massive decline in 10-year Treasuries, a decline fueled yesterday by new job offers (JOLTS). Job openings in the United States (JOLTS) fell in October to their lowest since 2021, according to data published by the US Bureau of Statistics. Job openings thus increased to 8.8 million units, compared to a consensus compiled by the Wall Street Journal at 9.3 million units. Operators will be able to deal with other previews on employment by Friday and the NFP with job cuts (Challenger), registrations for unemployment benefits and the investigation by the private HR firm ADP.

Right now, the EUR/USD is trading at $1.0790.

KEY CHART ELEMENTS
After a bullish runaway characterised by the school marubozu candle on 14 November, followed by a very short consolidation and an early bullish extension, a technical adjustment is underway, an adjustment catalyzed by the statistical publications of 30 November. The view is neutral in close proximity to the 20-day moving average (dark blue).

MEDIUM TERM FORECAST
Considering the key graphical factors that we have mentioned, our opinion is neutral in the medium term on the EUR/USD.

We will maintain this neutral opinion as long as EUR/USD prices are positioned between support at $1.0693 and resistance at $1.1012.