EUR/USD: Global geopolitics, EU inflation and US jobs on the menu

The Euro was consolidating, influenced by the decline in crude oil prices, a decline that has continued since the US military intervention in Venezuela. Outside of any international legal framework, Nicolas Maduro is on trial in New York, following his capture on 3 January by US special forces. Currency traders are assessing the short-, medium-, and long-term impacts on the global oil supply. And more generally, they are measuring the geopolitical risk in light of the redefinition of American imperialism, Trump-style.

"Internationally, this unilateral intervention marks the 'brain death' of the UN, already weakened by the conflicts in Ukraine and the Middle East. By acting without a Security Council mandate, the United States is flouting the UN Charter on state sovereignty and stripping the institution of its substance: if the world's leading power ignores conflict resolution mechanisms, the UN becomes a platform for protest without any coercive power," explains Joffrey Ouafqa, Director of Asset Management at Auris Gestion.

"By capturing Maduro, Trump didn't simply overthrow a leader; he revived the Monroe Doctrine of 1823, which asserts that the American continent is an exclusive sphere of influence for the United States. In doing so, he adopts the codes of the authoritarian leaders he "fights": legitimacy no longer stems from law, but from the ability to impose one's will on one's "natural sphere" of influence, excluding any geopolitical concerns."

The foreign exchange market will be keeping a close eye this week on the health of the US job market, with the Non-Farm Payrolls (NFP) report for December 2025 as the statistical highlight. The degree of deterioration in this still-flourishing job market is a crucial factor for the Fed in shaping its monetary policy.

"The US jobs report for December will be the main focus, as the Federal Reserve (Fed) signaled a cautious approach to rate cuts at its last meeting," comments Christopher Dembik, investment strategist at Pictet AM.

As a reminder, the content of the November report, released late due to the government shutdown, brought relief, easing recent concerns. While the unemployment rate rose to 4.7% of the labor force, job creation in the private sector was reassuring, at 63,000. And, crucially, hourly wage growth remained very modest at +0.1%, below consensus estimates. US employment is therefore slowing, but without any sharp decline.

"While some uncertainty remains regarding the size of the upcoming cuts, it is likely that two further rate cuts totaling 50 basis points will occur during the first half of the year. This would bring the key interest rate to between 3.00% and 3.25%. This is in line with the consensus. Subsequent developments will depend, in addition to the usual economic data, on the ability of Powell's successor to establish a foothold relative to Donald Trump," Dembik continued.

The key employment events leading up to the NFP are the Joint Job Openings Table (JOLTS) and the ADP survey this Wednesday, as well as the weekly jobless claims figures on Thursday.

In the immediate term, currency traders have taken note of the preliminary consumer price index for the Eurozone, for December 2025. Excluding volatile items (food, alcohol, and tobacco), prices rose by 2.4% year-on-year, below the consensus forecast of +2.5%.

Right now, the EUR/USD is trading at $1.1688.

KEY TECHNICAL ELEMENTS
While the short-term bias remains confirmed by the relative position of the 20-day and 50-day moving averages after their crossover, the buying entry point is not optimal at this stage.

MEDIUM-TERM FORECAST
Based on the key technical factors mentioned above, our medium-term outlook for the EUR/USD is neutral.

We will maintain this neutral opinion as long as the EUR/USD exchange rate is positioned between the support at $1.1608 and the resistance at $1.1771.