EUR/USD: US job figures reassure, Powell is relieved

The euro peaked at the top of its range* the day after the European Central Bank's highly anticipated ruling on its key interest rates. The powerful monetary institution in Frankfurt once again lowered its main "rate" for the euro by 25 basis points, hinting at a pause in the ongoing monetary easing process.

On the statistical front, the major event for foreign exchange traders this Friday is all about employment, with the monthly federal NFP (Non Farm Payrolls) report, which has just been published. Here are the main findings: first, the unemployment rate remains stable at 4.1% of the labor force. Average hourly wages are up slightly more than expected (+0.4%), and above all, job creation in the private sector, at 140,000, above expectations, completes the solid picture of employment. This puts the somewhat alarmist publication from ADP earlier in the week into perspective.

And above all, it eases the pressure on Jerome Powell, who has been under presidential pressure to ease rates since the beginning of Trump's term.

"THE ADP NUMBERS ARE OUT! 'Too Late' Powell now needs to CUT THE RATE. He's unbelievable! Europe has cut NINE TIMES (sic)!" Donald Trump wrote on Truth Social on Wednesday after the publication by the private human resources firm Automatic Data Processing.

"Expect a weak US jobs release to amplify Capitol Hill's demands for immediate rate relief, putting Powell and others firmly on the spot before the pivotal July meeting (...)," warned Stephen Innes of Spi AM, before the Labor Department's NFP verdict.

It should be noted that, on this side of the Atlantic, first-quarter growth for the Eurozone was revised by Eurostat to 0.5%, compared to an initial estimate of 0.2%.

Right now, the EUR/USD is trading at $1.1396.

* Sideways channel, a technical analysis term.

KEY CHART ELEMENTS
The currency pair is currently passing the highly important chart test of the 50-day moving average (in orange). A breather is needed before setting new highs. That is, the formation of several support points on this trendline. We currently have two.

MEDIUM-TERM FORECAST
In view of the key chart factors we have mentioned, our medium-term opinion is neutral on the EUR/USD exchange rate.

We will maintain this neutral opinion as long as the EUR/USD parity rates are positioned between the support at $1.1202 and the resistance at $1.1460.