EUR/USD: today is Non-Farm Payrolls Day!

The French political mess will not have finally made the EUR/USD bend, which continues its consolidation within a fundamental bearish bias. And the DAX and the CAC displayed, as the end of the week approached, very positive provisional weekly balance sheets. "The Parisian stock market may not be so affected by the political instability and economic difficulties encountered by France. This is also the case for the DAX40 in Germany, while the political and economic situation is not much more flourishing across the Rhine", analysed yesterday morning Greg KOUNOWSKI, Investment Advisor at Norman K.

No feeling of fear in the trading rooms, then, while the year 2024 will see a fourth tenant settle in the Office of Matignon. "In reality, a majority of investors could bet on the fact that this instability on both sides of the border will force the European Central Bank to continue its rate cuts in order to preserve the euro. The lever would therefore be more monetary than political."

"While we must remain attentive to the borrowing rate spreads between France and its neighbours, the current political situation would not be likely to create the conditions for a financial crisis in France."

On the statistical side, the main event of the day for currency traders is the publication of the NFP (Non Farm Payrolls) report, the traditional monthly survey on the health of private employment in the US. This health is excellent, as all the employment events published earlier in the week confirmed: weekly unemployment benefit registrations, new JOLTS job offers, ADP survey, Challenger job cuts. Here are the main consensuses concerning the report that will be published at 14:30 (Paris time): the unemployment rate is expected to be stable at 4% of the working population. The average increase in hourly wages is expected to slow down relatively, at +0.3% and the number of job creations at 217,000.

It should be noted that GDP growth in the Eurozone was confirmed by EuroStat at 0.3% in the third quarter.

Right now, the EUR/USD is trading at $1.0581.

KEY CHART ELEMENTS
The currency pair has just come out of a wedge pattern, in intense volatility, which confirms the bearish bias, now in place. Since then, the fragile supports have broken one after the other. Negative opinion maintained. Nevertheless, at this stage the decline, the formation of a technical rebound should not be long in coming, we are watching for signs.

In the immediate future, the flagship currency pair is completing a textbook pullback (graphic rejection) on $1.0550.

MEDIUM-TERM FORECAST
In view of the key chart factors that we mentioned, our opinion is negative in the medium term on the pair.

Our entry point is at $1.0580. The price target of our bearish scenario is at $1.0101. To preserve the capital invested, we advise you to position a protective stop at $1.0686.

The expected profitability of this strategy is 479 pips and the risk of loss is 106 pips.