EUR/USD: All eyes are on today's big job report

The euro regained a few pips against the dollar, in a market that nevertheless remains tense in the face of geopolitical risk, impatient for the normalization of monetary policies of the world's major central banks.

"The "higher for longer" policy on rates, led by the American monetary institution, has gradually borne fruit and inflation fell back to 2.5% in June, not yet at the 2% target but at a level low enough to accelerate discussions on a first rate cut", says Alex Baradez, head of analysis at IG France.

This is the whole meaning - the only one, moreover, of the last FOMC in the middle of the week, before a first cut in the Fed Funds in September. Over the rest of 2024, a 75 basis point cut, in two installments, is a scenario that holds the rope. A confirmation of the lull in prices, and an easing of tensions on employment, will confirm this working scenario.

Employment will be the topic of discussion today at 14:30 p.m. (EU time), with the monthly federal NFP report on the health of American private employment in July. Here are the different consensuses: a stable unemployment rate at 4% of the labour force, 175,000 job creations in the non-agricultural private sector, and a monthly increase in average hourly wages of +0.3%.

The publication of the ISM manufacturing index yesterday, 2 points below the consensus, argued for a net slowdown in American industrial activity.

Right now, the EUR/USD is trading at $1.0818.

KEY CHART ELEMENTS
After failing against a graphical resistance level around $1.0910, the EUR/USD has declined, now in a congestion zone of two remarkable moving averages, at 20 and 50 days. Negative opinion maintained.

MEDIUM-TERM FORECAST
In view of the key graphic factors that we have mentioned, our opinion is negative in the medium term on the EUR/USD.

Our entry point is at $1.0818. The price target of our bearish scenario is at $1.0601. To preserve the capital invested, we advise you to position a protective stop at $1.0866.

The expected profitability of this strategy is 217 pips and the risk of loss is 48 pips.